The Superior Industries International plant in Rogers.
Superior Industries International of Van Nuys, California, which makes aluminum wheels for automobiles, said Wednesday morning that it will close its manufacturing plant in Rogers, eliminating 500 jobs.
The publicly traded company said the move is part of an “initiative to reduce costs and enhance its global competitive position.” Superior expects to end operations at Rogers by the end of this year, with scheduled production shifting to other Superior facilities in Fayetteville and Chihuahua, Mexico.
The company said it expects to generate $15 million in labor cost savings year-over-year as a result of the move. It will pay between $2 million and $2.5 million in severance costs related to the closure.
“This action follows a comprehensive review of the company’s cost position in what continues to be an intensely competitive environment,” President and CEO Don Stebbins said in a news release.
“Our board and management team remain focused on building an efficient, operationally stronger organization that can compete effectively with manufacturers around the globe,” he said. “We appreciate the contributions of our team members at Rogers and will be providing assistance to them during the transition process.”
Scott Hardin, a spokesman for the Arkansas Economic Development Commission, told The Associated Press that the AEDC received advance warning of the closure.
“We’re working with the community and company to develop a plan to continue to market that facility for other manufacturers and also talking with the company about whether there’s any potential to add any jobs to the Fayetteville facility,” he said.
Superior supplies aluminum wheels to the original equipment market. Major customers include BMW, Chrysler, Ford, General Motors, Mitsubishi, Nissan, Subaru, Tesla, Toyota and Volkswagen.
As of Dec. 31, the company had 3,700 employees at six locations – its headquarters in Van Nuys, its two locations in Arkansas and three sites in Chihuahua.
Superior’s Rogers operation sits on about 20 acres at 1301 N. Dixieland Road. The operation’s main building is 277,731 SF.
In May, Superior broke ground on a new manufacturing plant in Chihuahua, set to be complete in early 2015. The company is investing $125 million to $135 million to build and equip the facility, which will have an initial capacity to produce between 2 million and 2.5 million wheels a year.
The company currently produces about 12.5 million wheels annually.
Raymond Burns, president and CEO of the Rogers-Lowell Chamber of Commerce, signed the deal with company leaders that brought the plant to the city in 1989. He said the chamber will do what it can to help workers find new jobs.
“It’s sad when an old friend goes, and these have been old friends and they’ve been good to the community,” Burns said of Superior. “We’re sure sorry to see them leave.”
The chamber had already planned a job fair for Oct. 8. Burns said today’s news will give the event extra meaning.
Burns said that, like other manufacturers, Superior has faced a tough regulatory and tax environment in the United States and noted the company’s expansion in Mexico. He said he’s grateful that some of Superior’s operations will remain in the region at the Fayetteville plant.
According to a report Tuesday by the U.S. Department of Labor, the Fayetteville-Springdale-Rogers metropolitan area had the lowest unemployment rate of Arkansas metropolitan areas in June at 4.9 percent. Burns said while the region is robust with new employers and expansions, the trick will be finding jobs for Superior workers at comparable wages.
Shares of Superior (NYSE: SUP) were trading down less than 1 percent Wednesday morning at about $20.04.
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