Stored energy solutions company EnerSys announced a realignment plan to close a flooded lead-acid battery manufacturing plant in Monterrey, Mexico, and move production to an existing facility in Richmond, Kentucky.
Restructuring Plan
EnerSys estimated that the restructuring plan would generate a pre-tax benefit of $19 million each year beginning in fiscal year 2027. Chief Operating Officer Shawn O’Connell noted that transitioning production from Mexico to Kentucky would help the company optimize costs and reduce risks related to tariffs.
The company added that the move aligns with a market shift toward high-performance, maintenance-free battery technologies, such as lithium-ion and Thin Plate Pure Lead.
Pre-Tax Charges
EnerSys anticipates a $20 million pre-tax charge under its plan, with the majority recorded during the first half of 2025. This includes a $7.6 million non-cash charge from equipment and inventory write-offs. The $12.4 million in cash charges will go to decommissioning, cleanup, legal expenses, contractual releases, and severance.
Additional Expansion
The company also revealed a $4.5 million expansion for its flooded lead battery production facility in Poland to accommodate potential demand surges and enhance operational flexibility in Europe.
EnerSys operates manufacturing sites in 12 countries, making specialty batteries, battery accessories, battery chargers, outdoor equipment enclosures, and power equipment.
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