By Connor Hart
EnerSys will shutter a manufacturing facility in Mexico and move production to an existing location in the U.S. amid President Trump's ongoing trade war.
The closure is expected to result in a pre-tax charge of approximately $20 million, the majority of which is expected to be recorded in the first half of the year, the company said Tuesday. Nearly 40% of the charge will stem from fixed asset and inventory write-offs.
EnerSys estimated a workforce reduction of 269 employees stemming from the closure. The company had approximately 10,797 employees as of March 31, 2024, according to the latest headcount available in filings with the Securities and Exchange Commission.
Under the restructuring, the company plans to sell the land, buildings and some equipment at the to-be-shuttered site in Monterrey. As a result of the closure, it forecast a $19 million annual pre-tax benefit, starting in fiscal 2027.
The facility's production of flooded motive power batteries will be moved to an existing facility in Richmond, Kentucky, the company said.
"The closure of our Monterrey facility and the transition of production to Richmond, KY will enable us to optimize our cost structure, maximize near-term IRC 45X tax benefits, and mitigate future risks associated with potential tariffs while reinforcing our commitment to strengthen domestic industrial security," Chief Operating Officer Shawn O'Connell said.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
April 01, 2025 16:38 ET (20:38 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.