Reko to close seven plants, cut 65 jobs
May 2, 2011 by The Canadian Press
Industrial machining company Reko International Group Inc. is closing several small plants and cutting 65 jobs as part of a corporate restructuring.
The job cuts affect about 28 percent of the Windsor, Ont. company’s workforce, which will shrink to 160 from 225 people.
Reko said it will close seven plants in Oldcastle, Ont., and reduce manufacturing and machining capacity, sell excess land and shift production among remaining plants. The moves will cut annual labour costs by $3.5 million and fixed costs by $4 million.
After the streamlining and the divesting of all non-strategic assets, the company forecasts its annual debt costs will fall.
In total, the moves are expected to result in $7.5 million of after-tax charges, gains on the sale of real estate of $2 million, and the generation of $9.5 million in cash.
The company expects to complete the transformation by the end of its current fiscal year in July.
“These initiatives mark a major and necessary transformation in our business,” said Diane St. John, CEO of Reko International. “Our goal is to create a business that is more strategically focused and better suited to today’s business environment. The changing landscape in the automotive market we serve required that we evaluate our operations and adapt our cost structure to market conditions.”
Founded in 1976, Reko provides high precision machining of very large parts, as well as tooling and automated technology for the transportation, energy, automotive, aerospace and consumer product sectors.