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Eaton to close Kansas piston and gear pump plant by October

Declining demand in key markets has spelled doom for hydraulics and power management company Eaton’s plant in Hutchinson, Kansas, which will close come October.

The company intends to permanently shutter the plant and to move its 100 jobs and production to Mexico.

The facility makes components for piston and gear pumps for use in mobile and industrial hydraulic applications, primarily in the construction and agricultural sectors.

Kelly Jasko, director of communications at Eaton’s Industrial sector, said the closure is “not a reflection” on the performance of employees at the plant but on the current market conditions.

“This is the result of the ongoing declines in key markets and demand for the products made at the facility. We’ve seen significant declines over the last three years and we don’t anticipate that to improve any significant way, which is why we came to share the plan to close by October 2017,” Jasko told the Hutchinson News.

Production of agricultural equipment at the plant has declined by 21% since 2013, while construction equipment production has fallen 16%.

A round of layoffs happened in Hutchinson already in May 2016, when Eaton cut 30% of the facility’s jobs.

‘Monumental community investment’

The shuttering of the plant has been long time coming, as Eaton announced the plans already a decade ago in June 2006, but initially cancelled the plan after the company received a $3.5 million incentive from local and state governments along wage cuts and freezes.

Workforce at the plant was still cut by 150 in 2006, with the slashed jobs moved over Mexico.

Eaton was to pay back $2 million of the incentive package over ten years through Kansas state withholding taxes of the plant employees.

Should the plant have closed before the deadline, Eaton would have had to pay the remaining portion of the debt out of its own pocket.

Jasko said the ten-year agreement expires in May and the company will be talking to “appropriate local official” to make sure that there are no further contractual commitments.

Kirk Johnson, interim CEO of the Hutchinson/Reno County chamber of commerce, called the news of the plant being shut down “disappointing”.

“The community made a monumental investment in 2006, with the city, county and state, in a collaborative effort, reversing the company headquarters’ closure decision, which was unprecedented in the company’s history,” Johnson said.

“We’ve maintained communication with Eaton as they’ve changed personnel at this point and we continue to express support and offer assistance. But the economy dictates course of action more than the community ever can,” he added.

The Kansas closure is not an isolated case, as in November 2016 Eaton announced plans to close its heavy-duty hydraulic pump and motor manufacturing facility in Spencer, Iowa, in the first quarter of 2017.

This article was written by Ilari Kauppila, editor at Fluid Handling International