Jeld-Wen’s decision to shutter its Yakima door and window manufacturing plant appears to be part of a strategy to consolidate and modernize its operations worldwide.
Although the Charlotte, N.C.-based manufacturer and distributor declined to discuss why it’s closing the Yakima factory, which opened in 2005, company officials discussed a “footprint rationalization” plan with investors on its fourth-quarter earnings call last month.
By 2022, Jeld-Wen intends to reduce its manufacturing footprint worldwide by 3.2 million square feet — from 24.6 million to 21.4 million — through plant closures and consolidation, according to a presentation made during the call.
Jeld-Wen President and CEO Gary Michel said the company had announced the closure of two manufacturing facilities in North America, along with several smaller facilities in Australia. He did not identify the Yakima plant by name.
Michel said the company expects to start seeing savings from plant consolidation by the second half of this year and projected annual savings of $100 million by 2022.
The company also has plans to modernize its facilities.
“This footprint rationalization process involves far more than consolidating square footage. ... We’re also modernizing many of our production capabilities and deploying standard work across the organization, which will improve our cost, flexibility, quality and safety while reducing cycle time and waste leading to higher quality products and improved customer experience,” Michel said during the conference call.
Jeld-Wen, founded by Richard “Dick” Wendt in 1960, has undergone several changes in the past decade. After being close to bankruptcy when the Great Recession and housing market bubble devastated revenues, Onex Corp., a Canadian equity company, kept the company going with a $675 million investment in 2011.
Jeld-Wen quietly relocated from Klamath Falls, Ore., to Charlotte, N.C., in 2015 and became a public company in 2017. It has about 20,000 employees working in 117 facilities in 19 countries worldwide.
The company reported net revenues of $4.347 billion in 2018, a 15.5 percent increase from 2017.
Most of those revenues came through acquisition of three companies, but Jeld-Wen reported that a small portion of the increase is also from more sales activity outside those acquisitions, according to a news release on the company’s earnings.