LEWISTOWN - Two days before Thanksgiving, the workers at Kardex were notified the plant located in the Mifflin County Industrial Development Plaza would be closing by June 2012.
Kardex manufactures automated storage and retrieval systems and was acquired in 2009 by a Zurich, Switzerland-based company, Kardex AG. The Swiss company signed an asset purchase agreement to acquire the assets of U.S. competitor Kardex Systems Inc., which previously filed for Chapter 11 bankruptcy in a U.S. court.
In the past several years, the plant was completely upgraded, including new equipment, a new roof and other renovations.
Sentinel file photo
Kardex announced this week that its Lewistown facility will shut down by June 2012.
Money for these projects was made possible through funding from the American Recovery and Reinvestment Act, a loan obtained by Mifflin County Industrial Development Corporation from a local bank, as well as a $3.8 million investment from Kardex for the 230,000 square foot facility.
When reached by phone Wednesday morning, Rick Hersman, Vice President of Human Resources at the Kardex plant in Lewistown, was clearly dismayed by the news from the corporate office in Zurich.
Hersman said 61 people will lose their jobs.
Hersman said he was limited in what he was permitted to talk about, but did state that Lewistown production would be transferred to several other plants, including one in Maine as well as facilities in Germany.
The Kardex corporate press release states the company was "streamlining its structures in the USA."
Hersman said he has been in touch with CareerLink, located in the MCIDC Plaza, and appointments are being set up for Kardex employees.
"I guess because of the past investments Kardex made we were very surprised they would close this particular plant," MCIDC President Rob Postal said.
Postal said Kardex is the largest company in the plaza in terms of square footage and MCIDC will be working to get another company into that facility by the time the Kardex fully shuts down production.
During an April 2010 celebration held at the Lewistown Kardex facility, politicians and local industry leaders had gathered to tout the company's expansion as a success.
Pennsylvania Department of Community and Economic Development Secretary George Cornelius was on hand at that ceremony, and said the project was of particular importance to then Gov. Edward G. Rendell and other politicians.
"Kardex could have chosen to locate anywhere in the United States. Instead, it decided to stay an expand in Pennsylvania because we were willing to invest in its future, its workers and the Lewistown community," Rendell said in a news release at the time. "Despite the tough economy and a tight budget situation, we need to continue investing in our state and in our workers so that when the economy fully recovers, we're in a position to capitalize on the opportunities to attract new businesses and create jobs."
Cornelius said during that ceremony he grew up in Huntingdon County and he was not surprised Kardex "found a good work force here.
"Kardex could have moved anywhere, I am not surprised they moved here," he said.
Cornelius said the project had the support of many local leaders such as the Mifflin County Commissioners and the MCIDC Board of Directors, led by Postal.
MCIDC worked with the company and the Governor's Action Team to secure funding.
"Projects of this importance don't happen without partners and we certainly appreciate all the help from the commonwealth ... Kardex's decision has excited our community," MCIDC board Chairman Gary Oden said during that ceremony.
State Sen. Jake Corman, R-Bellefonte, and State Rep. Adam Harris, R-Mifflintown, also were on hand for that ceremony.
Corman said Kardex would not regret investing in the people of Mifflin County.
Kardex CEO Jos DeVuyst said during the ceremony that he anticipated big growth at the Lewistown facility in the next year, as the company would continue to bring in more modern machinery and robotics equipment as demand for their product lines increased.
"There are 70 people employed here now ... I am convinced that figure will go up," DeVuyst said. "For a European company active in the U.S. market, it is very important to have a manufacturing facility in the United States in order to save transport costs, avoid currency fluctuations, and last but not least, to be close to our customers and dealers."