Komatsu closing facility

COVINGTON - Komatsu America Corp. announced Friday that it will close its Covington facility by the end of the year, affecting 160 jobs.

Komatsu is reorganizing its manufacturing and remanufacturing operations in North America, and will close a total of three facilities, including one in Quebec, Canada, and another in Lexington, Ky. A total of 500 employees will lose their jobs, with about 80 given the opportunity to relocate or take on new positions, according to Mari Aoyagi, manager of public relations for Komatsu.

Production at the forklift manufacturing plant in Covington will be transferred to an existing plant in Newberry, S.C.

The recession and decreased demand for products were reasons given for the reorganization in a company-issued press release.

"The decision to reorganize these North American facilities was not made lightly, nor easily," said David Grzelak, chairman and CEO of Komatsu America Corp. "However, this restructuring will allow Komatsu to better utilize the resources we have and place us in a better position for the future."

Komatsu opened its local plant, located in Lochridge Industrial Park, in 1996.

Shannon Davis, economic development director for the Covington-Newton County Chamber of Commerce, said the chamber will work with Komatsu to find tenants for the building.

"It's a tough economic time. We are actively talking with existing industries and doing all we can to retain those," she said. "It does come to a point where, fiscally speaking, the numbers just won't work for the company. It's a product of where we are right now."

Komatsu America Corp. is a subsidiary of Komatsu Ltd., which was established in 1921. It is the world's second largest manufacturer and supplier of construction and mining equipment. The company also makes industrial-use machinery, such as forklift trucks, sheet-metal machines and forestry equipment.

In the fiscal year ended March 31, 2008, consolidated net sales for Komatsu Ltd. were more than $22 million and the company had more than 39,000 employees.

Crystal Tatum can be reached at crystal.tatum@newtoncitizen.com.