PlasticSource Inc., a custom injection molder in El Paso, Texas, has closed its doors after losing the second of two large customers.
The 8-year-old company, which molded large-tonnage parts, closed Jan. 17 after major customer Toro Co. took its work elsewhere, said PlasticSource Vice President Doug Swisher.
The firm had been struggling since another major customer, Electrolux AB, moved three vacuum cleaner product lines to China last summer, Swisher said Jan. 27 by telephone. After Electrolux left, the molder downsized its workforce from about 170 to 50-60 people, he said.
Toro pulled its work after a local television station aired a report that PlasticSource was behind on payments to employees, Swisher said. Employees were paid within five days, but Toro did not want to be associated with negative publicity, he said.
``We still had some work, but not enough to support us,'' he said. ``We were struggling to replace lost business. Once Toro left, we knew we had to close.''
PlasticSource primarily provided parts to customers in Ciudad Ju rez, Mexico, and others within the maquiladora area. That business dried up for awhile after customers moved production to China. But some of that production had returned.
The El Paso area has been hit especially hard by the closing of injection molding shops. Besides PlasticSource, the city recently has lost plants operated by Thermotech Co., Titan Plastics Group Inc. and Falcon Plastics Inc.
Stockholm, Sweden-based Electrolux shut its El Paso plant in August and moved some of that operation, including injection molding, to Mexico.
``It's a bit of a graveyard for injection molders here right now,'' Swisher said.
PlasticSource has sold many of its 23 injection presses but has a few machines left to sell, Swisher said. The company's 60,000-square-foot building was leased.
PlasticSource has been owned since January 2004 by a Tucson, Ariz.-based investor group headed by David Coburn.
At its peak, PlasticSource recorded sales of $17 million annually, Swisher said. Without the Electrolux business, annual sales had dropped to around $12 million.