Skf Moves Automotive Seals From Elgin

SKF's Ongoing Seal Business Restructuring

SKF AB, a global leader in bearing and seal production, based in Stockholm, Sweden, is undertaking significant restructuring steps in its seal business. This change is largely driven by the persisting weakness in the North American automotive industry.

Elgin Plant's Shift in Automotive Seal Production

SKF Elgin, the manufacturing site formerly known as Chicago Rawhide / CR Seals in Elgin, Illinois, is undergoing significant changes. The facility will cease automotive seal production, with the product line being transferred to other SKF locations:

• SKF Sealing Solutions plants in Hobart, Oklahoma, and Seneca, Kansas.
• The Guadalajara plant, formerly CR Mexicana, manufactures a broad spectrum of automotive, truck and industrial seals.

Impact on the Elgin Workforce

CR acquired full control of the plant in mid-1998. This move will unfortunately, lead to a significant reduction in the workforce at the Elgin facility, cutting down from 430 to 270 employees.

SKF will incur a financial charge of SEK 35 million in the current quarter for this transition, followed by SEK 25 million in 2009. By 2010, SKF expects annual savings of about SEK 30 million.

SKF's History of Acquisition and Restructuring

SKF's acquisition of Chicago Rawhide / CR Industries in 1990 initiated a series of changes:

• In 2001, SKF started breaking up CR Seals and spreading the operations across existing SKF divisions. In the move, automotive seals moved under SKF Automotive as it inherited CR Americas, CR Asia, and CR Automotive Europe. 
• Then in 2002, SKF closed the CR bearing seal plant in Bethlehem, Pennsylvania and moved production to RFT in Italy under the Electrical division. 
• In 2003, SKF closed the CR industrial seal plant in Franklin, North Carolina.
• In 2005, SKF announced it was eliminating the Chicago Rawhide and CR brands in favor of its worldwide monobranding strategy as simply SKF. 
• Also in 2005, SKF closed the CR automotive seal plant in Springfield, South Dakota, even then citing weakness in the North American auto industry. Springfield's seals moved to Elgin and are now among the production being moved again.

SKF's Adaptive Strategy in a Dynamic Market

SKF's latest restructuring efforts reflect its adaptive approach in a dynamically shifting automotive market. By consolidating and optimizing its production facilities, SKF aims to maintain its competitive edge and financial health in the global bearings and seals industry.

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