Bomag's Kewanee Strategy

Bomag's Kewanee Strategy

September 5, 2013

Bomag’s announced closing of its Kewanee, Ill., headquarters poses some problems for the small central Illinois town, but it appears to position the multinational to take full advantage of the imminent road-building comeback.

I say imminent, even with the stalemate in Washington, because the infrastructure itself will soon force the issue.

Bomag officials are mum on what the move means beyond what the Fayat-generated press release said. Industry watchers, however, speculate that the move will solidify Bomag’s offerings in road building products and enable its dealers to fully integrate the recently aquired Cedarapids and CMI products. Bomag now offers asphalt pavers, compactors, soil compactors, milling machines, and reclamation equipment.

The Oklahoma facility currently manufactures Cedar Rapids-branded asphalt pavers and material transfer products, and a CMI recycler/stabilizer. The MPH recycler/stabilizers are made in Germany. Expect some major product announcements by March, during Conexpo 2014.

Speculation on the location of the “southern” facility has centered on a right-to-work state near a major ocean port. Illinois has developed a negative reputation for business development in recent years, although such conditions have not been cited as motive for this closure.

Fayat says the new facility will include a training center, which should enable Bomag to expand and further develop this product-support function. Again, such a move will only strengthen Bomag’s ability to take advantage of road building and take care of its dealers.

Civic leaders in Kewanee wasted no time working on finding a replacement tenant for the plant, which will be empty by the end of 2014. Fayat made the announcement well in advance of the closure, a potential silver lining to the news that between 100 and 200 people will lose jobs in this town of slightly less than 13,000.

Kewanee is located within an hour or so from plants run by Caterpillar, Komatsu and John Deere, as well as a couple of other manufacturing facilities. But many of the workers employeed in Kewanee are in their 50s and 60s, sources tell me, which may make such a move difficult.

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