Schneider Electric plans to move production of low-voltage circuit breakers out of its Cedar Rapids plant by the end of next year, a move expected to eliminate some 80 jobs.
The electrical supplier based in Rueil-Malmaison, France, informed employees Tuesday that the transfer of production will begin in the next few months and be completed by the end of 2013.
Schneider Electric employs about 375 people at the Cedar Rapids facility. It will remain a major engineering and development center for Schneider Electric, company spokesman Marty Hanna said. It also will continue to produce contacts for circuit breakers and certain older circuit breaker models that are not high-volume products, Hannah said.
The announcement came as a surprise to local economic development officials, who had been in contact with local plant officials recently. Dennis Jordan, vice president of economic development for the Cedar Rapids Metro Economic Alliance, said the group will be reaching out to the company.
The Cedar Rapids plant, known locally by its longtime name of Square D, dates back to 1954, and was acquired by Schneider Electric in 1991.
The plant employed over 1,000 in early 2001, before a market after the dot-com bust resulted in a series of product line transfers out of Cedar Rapids and layoffs.
Hanna said Square D remains a very strong brand in the commercial and residential power supply market. He said the number one reason for the production shift is that the company is always looking for ways to enhance its competitive position and reduce costs where it can.
“The economy is very uncertain today,” Hanna added. “Its wobbly. It’s very uncertain.”
After reaching the decision, Hanna said Schneider Electric wanted to inform employees as quickly as possible so that they can pursue employment opportunities. He said the company will begin negotiations with its unions as required by its labor contracts.
Schneider Electric will provide affected employees with severance, benefits and outplacement assistance, Hanna said.
The production will be shifted to two plants in Mexico and one United States location. Transfer opportunities may be available for a small number of employees, Hanna said.
The plant’s workers are represented by Teamsters Local 238 and Machinists Local 831. Teamsters Local 238 officials were not available. Machinists Local 831 officials had no immediate comment.