Firm's activities in Lawrence
• 1997: Sauer-Sundstrand Co., a German-based manufacturer, announces plans to invest more than $30 million in building a production plant in Lawrence’s East Hills Business Park.
• 1999: Plant opens in January, and by summer 45 employees are making pumps and other items for off-road equipment. In September, parent company Sauer Inc. announces plans to merge with Danfoss Fluid Power, a Danish company, resulting in the formation of Sauer-Danfoss Inc.
• 2006-07: Plant had 280 workers at height of construction boom.
• 2008: Plant manager announces plans to reduce shifts, affecting about 50 of plant’s 150 employees.
• 2009: In January officials say they’ll cut 20 jobs, the first among 40 job losses up until Monday’s announcement that the plant would be closing by the end of June.
Sauer-Danfoss Inc. will close its Lawrence production plant by the end of June, leaving 100 people without jobs in the city and listing another major site in the East Hills Business Park for sale.
The company announced Monday that it would be closing the 165,000-square-foot plant at 3840 Greenway Drive, citing a massive downturn in sales for the motors and transmissions produced there.
Job cuts won’t begin until after the first of the year, and eligible employees will receive severance packages generally equal to one week’s pay for each year of company service, said Matt Bendler, human resources director for the company’s Americas and Asia Pacific Regions.
Fewer than 25 employees will be offered transfers to other Sauer-Danfoss plants. Equipment used to make motors and transmissions used in off-road equipment — from large implements to heavy-duty lawnmowers — will be moved from Lawrence to larger plants in Ames, Iowa, and Freeport, Ill.
Driving the Lawrence closure: The company’s sales are down nearly 50 percent from the $2.1 billion recorded last year, Bendler said. Employee count is down by nearly 40 percent, as the company closed two other plants and has steadily shed workers: 40 so far this year in Lawrence, and another 400 during the past 12 months in Ames.
The decision to close the Lawrence plant has nothing to do with performance and everything to do with size, Bendler said. While the site had 280 employees as recently as 2006-07, the decision to move its operations to larger sites makes economic sense.
“This is heartbreaking for us all,” said Bendler, who is in Lawrence this week to meet with employees. “It’s a wonderful facility, with absolutely fantastic employees. … We’re trying to come up with ways to be as creative as we can get, but unfortunately there are only so many pure layoffs we can do. Then it’s plant closures.”
Sauer-Danfoss expects to spend $9.8 million on the closure, to cover the costs of employee terminations and relocations, moving equipment to other plants and related costs. The building and site will be listed for sale, Bendler said.
Two other East Hills sites already are vacant, with owners seeking new businesses to move in:
l An 80,000-square-foot building that had been occupied by Progress Vanguard Corp., which had 55 employees working on parts for rail locomotives before closing earlier this year.
l A 45,000-square-foot building that had been built in 2004 for Serologicals Corp., but never entered full production of a cell-growth liquid used in research and pharmaceuticals applications. The property has been for sale since early 2006.
Tom Kern, president of the Lawrence Chamber of Commerce, said the chamber would provide assistance to Sauer-Danfoss as the “great company and great corporate partner” moves toward a transition.
“It’s an unfortunate outcome of the economic climate that we’re presently in,” Kern said. “It’s not just Detroit and the auto industry. It’s everywhere.”
But Lawrence has five or six prospects considering East Hills, Kern said, and — unlike in past years — there now are sites available.
“There is some interest in East Hills and businesses coming to Lawrence,” Kern said. “We continue to look forward and I feel positive about the future.”