Iola’s Haldex Brake plant will be closed by the end of the year, affecting about 160 employees.
Cathy Lynch, human resources director, said she was uncertain how quickly operations at Iola would cease and whether employees would be given opportunities to transfer to another of the Swedish company’s facilities. She expects to know more in the next couple of weeks.
A news release originating at the company’s headquarters in Stockholm, Sweden said:
“As a final step in the earlier announced cost-reduction program, to serve customers better and increase global competitive strength, Haldex Commercial Vehicles Systems (CVS) will further expand the Monterrey, Mexico facility and consolidate North American manufacturing activities at that site.”
The company said a review of CVS production in North America prompted the concentration of manufacture in the Mexican plant, “… in a region of increasing significance for the North American automotive industry.” The consolidation is expected to generate annual savings of $6 million.
Haldex has manufactured brake system components for commercial over-the-road vehicles here for more than 35 years. The production of brake cylinders was moved from Iola to Monterrey in 2007.
“This action results from the need to consolidate and improve activities that have been brought into Haldex through past acquisitions,” the company said. “Investing in one site utilizes capital and human resources more effectively. Haldex will work with affected Iola employees, offering severance pay, benefits continuation and outplacement services, as well as pursue available federal and state programs that benefit employees due to loss of employment.”
HALDEX develops and manufactures brake systems for heavy trucks, trailers and buses. The product portfolio comprises all main components and sub-systems in a complete brake system: actuators, air management, brake controls, foundation brake and friction products.
In addition to the United States and Mexico, Haldex has production facilities in Brazil, India, China, Great Britain, Sweden, Germany and Hungary.
The manufacturer of brake components opened in Iola in 1973 as Midland Brake, a wholly-owned subsidiary of Echlin Manufacturing Co., and later became Haldex Brake. Employee numbers at one time were more than 400.
Echlin selected Iola for its plant in the early 1970s at about the same time as Gates Rubber Co., now Gates Corporation, announced it would establish a hose-manufacturing plant in Iola. Both came after a local economic downturn in the 1960s prompted by the closing of two of the town’s main employers, the Lehigh Cement plant and the Pet Milk receiving station. Iola Industries, a local economic development group, was instrumental in attracting Echlin and Gates.