Key Tronic Cuts Irish Operation Company Shifts Manufacturing From Dundalk To Juarez, Mexico
Key Tronic Corp. is transferring another big chunk of its manufacturing operation to Juarez, Mexico, but this time, the company’s operations in Spokane won’t be affected.
Key Tronic is shutting down its manufacturing operations in Dundalk, Ireland, and shifting those lines to Juarez.
The company will shift its Dundalk facility to a “European sales and distribution center which will handle sales, marketing, customer service and support functions.”
The changes will take place over the next two months.
“The number of employees at Dundalk is expected to be reduced over the transition period from the current level of 391 to approximately 75,” Fred Wenninger, Key Tronic’s chief executive officer, said in a news release Thursday. “Over time, as the company expands, Key Tronic expects to increase its customer support and logistics capabilities in Ireland.”
Very limited manufacturing activity will continue in Dundalk, as the letters, numbers and symbols for keyboards manufactured in Mexico will be printed on the boards in Ireland to provide localized languages for the European markets to which the keyboards will be shipped.
Two years ago, Spokane-based Key Tronic acquired the keyboard manufacturing division of Honeywell Inc. The division included a state-of-the-art manufacturing facility in Juarez.
Since that time, the company has developed a strategy of developing products in Spokane, and then shifting production to Juarez as soon as the new-product problems are worked out. The cost of labor in Juarez is a fraction of that in Spokane.
The company closed down its manufacturing facility in Cheney a year ago as a part of that strategy. That closure resulted in a reduction of the local Key Tronic work force, but company officials say growth fostered by Key Tronic’s stronger financial position resulted in hiring in other areas that more than offset the manufacturing job losses.
But the company laid off 60 Spokane employees in January following a slowdown in the personal computer market, and another 50 in February when it shifted production of its IMB Thinkpad notebook keyboard to Juarez. Key Tronic’s Spokane employment is about 850. It employes about 1,400 in Juarez, and Kathleen Nemeth, Key Tronic’s corporate counsel, said the Dundalk closure “will certainly result in some increase in that work force.”
The company established its Ireland operation years ago in order to have a manufacturing facility close to its European markets. And until this week, the Dundalk factory had escaped the effects of the company’s Juarez strategy.
But Nemeth said Thursday the savings in labor costs in Mexico will more than offset the costs of shipping keyboards from Juarez to Dundalk for final distribution.
“Losses from our operation in Dundalk had to be eliminated and our plant in Juarez offers us that opportunity,” Wenninger said. “Lower costs at our Mexican plant will help us meet the challenge of our Asian competitors.”
Wenninger said earlier this year Key Tronic would like to re-establish a manufacturing presence in Asia.
Founded in 1969, Key Tronic is one of Spokane’s leading manufacturing employers. The company produces computer keyboards and other input devices for the global computer market.
, DataTimes MEMO: This sidebar appeared with the story: Mapping Key Tronic Here are Key Tronic Corp. plant locations and employment levels: Spokane - 848. Juarez, Mexico - 1,417. Las Cruces, N.M. - 60. Dundalk, Ireland - 75. El Paso, Texas - 12.