Mold maker and automation equipment specialist Reko International Group Inc. is consolidating its operations near Windsor, Ontario, closing seven facilities and cutting 65 jobs.
The company will still make the same range of molds and equipment, but the consolidation will allow it to trim fixed costs and eliminate excess capacity, said Chief Financial Officer Carl Merton.
We're still building tools today, and we will still build them in the future, he said in a telephone interview. We still build automation equipment and we will into the future.
Reko currently operates nine different plants, seven of them in the Windsor suburb of Oldcastle, where it is based. The company will close those plants and shift manufacturing to its nearby Lakeshore, Ontario, plant that already houses its automation facility. The consolidation will also trim the workforce to 160 from the current 225 jobs.
Publicly traded Reko posted sales of C$40.1 million ($42.2 million) for its fiscal 2010, with a net loss of C$7.4 million ($7.8 million). It also saw a net loss of C$1.25 million ($1.3 million) on sales of C$8.5 ($8.96) for the first quarter of its 2011 fiscal year. It said in its financial documents that it was seeing growth in some key areas, but was also targeting losses by moving into aerospace, increasing sales in capital equipment and improving its cost structure through targeted restructurings.
The company also addressed the need to restructure its mortgage payments. It still must complete that effort by a July deadline, Merton said, but the sale of its seven properties in Oldcastle and combining operations will help its finances.
Reko's bank remains firmly behind it, he said, adding that the consolidation plan was not forced on the firm. The move simply makes more business sense all around, he said.