Flexsteel closing Dubuque plant

A full employee parking lot on March 24 at Flexsteel’s new manufacturing plant on Seippel Road will soon be a thing of the past as the company announced Wednesday that is closing the facility permanently.

UPDATE

Flexsteel Industries Inc. announced this morning that it will permanently close its Dubuque manufacturing facility.

The company announced the plan in a press release issued moments before a conference call about its latest quarterly earnings, which were released Tuesday night. 

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The closure will result in the loss of 213 jobs, including about 150 manufacturing jobs based at the Seippel Road facility. The remainder of job cuts will be corporate employees, engineers and support workers in Dubuque.

Those losing their jobs permanently include 98 employees that the company reported in March would be laid off for up to three months. 

The permanent job reductions will drop Flexsteel’s workforce in the city from about 350 workers to fewer than 140.

Greater Dubuque Development Corp. President and CEO Rick Dickinson said it is “a sad day” for Flexsteel workers and the Dubuque community.

“It is heart-wrenching to hear this news and to know it will have a negative impact on 200-plus employees and their families,” he said. “Three years ago, we did everything humanly possible in the hopes of preventing this from happening.”

In 2016, Flexsteel leaders unveiled plans to close the company's longtime manufacturing facility on Jackson Street. Officials toyed with the idea of moving manufacturing operations out of town.  

That following spring, however, Flexsteel announced plans to invest $28 million in a new facility in Dubuque Industrial Center South. The project was supported by more than $10 million in incentives from local and state entities.

While Flexsteel soon will leave that structure, the company will maintain a presence in Dubuque.

“Our plan is to keep our corporate headquarters here,” CEO Jerry Dittmer said.  “We are committed to Dubuque for the long term, and we’re still excited to be here from that standpoint.”

In addition to the facility in Dubuque, Flexsteel officials confirmed they will close a facility in Starkville, Miss.

The closures are tied to Flexsteel's decision to exit the recreational vehicle and hospitality businesses, where customer demand had declined rapidly. The COVID-19 pandemic exacerbated these problems.

"(These businesses) are no longer strategic to the future of the company and cannot deliver an adequate financial return," Dittmer said in today's conference call. "By exiting these noncore businesses, we will sharpen our organizational focus."

On Tuesday, Flexsteel reported a net loss of $5.3 million in the quarter that ended March 31. The company reported a loss of $5.4 million during the prior quarter.

Net sales for the most-recent quarter totaled $98.8 million — a 11% decrease from the $111.5 million in sales during the same quarter in the prior year.

Through the first nine months of the company’s fiscal year, net sales were down 12% compared to the same time period in the prior year.

Flexsteel officials temporarily shut down the Seippel Road plant on March 27, citing safety concerns and order decreases linked to COVID-19.

The plant has remained closed ever since, but officials confirmed it will soon reopen, allowing workers to address order backlogs and ramp down the operation. 

“Our hope is to open up as early as next week," Dittmer said.

There is no definitive timetable for that facility's permanent shutdown, but officials said today it could be as early as June.

Today's announcement marked the second time in a two-month span that Flexsteel's transformation plans directly impacted Dubuque.

In February, the company announced that it would move some production of its trademark "blue steel spring" to facilities in Mexico and Asia. The spring previously had been produced exclusively in Dubuque.

This story will be updated.