NUE Nucor Corporation

By Andrew Tangel 

INDIANAPOLIS -- President Donald Trump boosted the hopes of employees at Rexnord Corp.'s factory here in December when he castigated the company for "viciously firing" workers and planning to move their jobs to Mexico.

Two months later, Rexnord is still planning to close the industrial-bearings factory, which employs about 350 people, despite Mr. Trump's shaming and his earlier intervention to stop a nearby Carrier Corp. furnace factory from closing.

Rexnord says moving the plant to Mexico is part of a plan to save $30 million annually. Workers say they have been packing up machines while their replacements, visiting from Mexico, learn how to do their jobs.

"That's a real kick in the ass to be asked to train your replacement," said machinist Tim Mathis, who has worked at Rexnord for 12 years. "To train the man that's going to eat your bread."

Milwaukee-based Rexnord is one of many companies plowing ahead with plans to invest in Mexico despite Mr. Trump's vows to cajole companies into keeping their assembly lines in the U.S. Some, including heavy-equipment maker Caterpillar Inc. and steelmaker Nucor Corp., are overseen by officials who belong to a panel advising Mr. Trump on manufacturing policy. Executives at Peoria, Ill.-based Caterpillar are moving ahead with a restructuring that includes shifting jobs from a Joliet, Ill., factory to Monterrey, Mexico. "We're just going to have to wait and see how this plays," Caterpillar Chief Financial Officer Brad Halverson said in a January interview, referring to potential Trump-era shifts in trade policy.

A Caterpillar spokeswoman said the company has been reducing its workforce world-wide to stay viable "in the longest downturn in our 92-year history."

Charlotte, N.C.-based Nucor is moving forward with Japan's JFE Steel to build a new plant in Mexico to make steel for car makers.

Nucor Chief Executive John Ferriola said those plans could change if new policies penalize U.S. companies that invest in Mexico. "We're watching the situation in Washington very, very closely," he told analysts on Jan. 31.

Mr. Trump hasn't specified what taxes, tariffs or trade deals he might enact in his effort to boost U.S. manufacturing and factory employment.

In late January, the administration announced the creation of a 28-member group of business and labor leaders to help advise the White House "on how best to promote job growth and get Americans back to work again." Caterpillar Chairman Doug Oberhelman and Nucor's Mr. Ferriola were named as advisers.

On Wednesday, Intel Corp. CEO Brian Krzanich, after a meeting with the president, announced plans to upgrade an existing facility with a $7 billion investment in Arizona that will employ 3,000 people. Mr. Krzanich, who also is in on the advisory panel, said Intel was encouraged by the new administration's policies to make the U.S. a more attractive place to do business.

However, the continuing investments abroad underscore the scale of the economic forces that confront Mr. Trump's plans. The White House didn't respond to a request for comment.

Manitowoc Foodservice Inc. went ahead with plans to wind down its soft-drink dispenser factory near Sellersburg, Ind., and lay off about 80 employees in the wake of Mr. Trump's election, according to local officials. The company, which in August had announced plans to shift much of the production to facilities in Mexico, declined to comment. Electronic component maker CTS Corp. still plans to phase out production at its Elkhart, Ind., plant by mid-2018 and shift production to China, Mexico and Taiwan, a spokesman said. The company has said about 230 employees would be affected as part of the restructuring.

Ford Motor Co., which Mr. Trump criticized during his presidential campaign, decided to scrap plans to build a new factory in Mexico and would create 700 new U.S. jobs. But the company said in January it would still shift production of its Focus small car from Michigan to an existing Mexican facility. General Motors Co. is in the process of moving more production to Mexico, despite criticism from Mr. Trump, but has also committed to continue with pre-election plans to add more jobs in the U.S.

Rexnord Chief Executive Todd Adams said in a December letter to employees that U.S. workers still accounted for more than half of its approximately 8,000-employee workforce. The company has operations across the globe, including Europe, Asia and Africa.

While Rexnord hasn't specified how many of the Indianapolis jobs would move to Mexico, it is expected to keep about 25 office jobs there and in Milwaukee, and add 50 jobs in Texas.

Mr. Adams declined interview requests through a spokeswoman, who didn't respond to requests for comment.

In an earnings call with analysts last week, Mr. Adams said the company didn't think the move to Mexico would be "something that we would regret."

"But you know, to be determined, obviously, depending on what happens," he said.

Rexnord workers in Indianapolis weren't optimistic about their prospects if the sprawling plant in an industrial zone near the airport closes down. Some said they had refused to help train the workers from Mexico who will replace them. Rexnord has said they aren't required to help, and offered extra pay to those that do.

The workers worried about finding jobs that paid as well -- about $25 an hour, excluding overtime, according to their union, the United Steelworkers Local 1999. They fretted about mortgage, car and tuition payments.

At a rally last week attended by workers hoping for a last-minute reprieve, speakers criticized "corporate greed" and trade deals such as the North American Free Trade Agreement with Canada and Mexico. Former Democratic presidential candidate Bernie Sanders addressed the crowd via a prerecorded video message.

"It just puzzles me to think that they have to [reduce costs] by dumping us out," said Gary Canter, a machinist who has worked at the Rexnord factory for eight years. "It's very un-American."

Mr. Canter said he voted for Mr. Trump. He remained hopeful the president would ultimately boost manufacturing, creating new jobs for his colleagues elsewhere even if the Rexnord plant isn't spared.

"We gave this man a chance because it wasn't a typical politician that's done nothing for us," Mr. Canter said.

--Bob Tita contributed to this article.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

February 09, 2017 02:47 ET (07:47 GMT)

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