MINNEAPOLIS – Nortech Systems has announced plans to close its manufacturing plant in Blue Earth, MN, by the end of the year.

In the company's first quarter earnings call, CEO Jay Miller said Nortech will be shifting its wire and cable assembly and system-level assembly manufacturing to its Bemidji, MN, location, and all employees at the Blue Earth facility will be offered jobs at the company's other Minnesota facilities.

Miller said the Blue Earth facility is an older, less efficient plant, and the Bemidji facility is newer and certified for aerospace and defense.

"It just made sense with a newer, more efficient facility in Bemidji to move operations and hopefully, as many of our really, really good people as possible, up to Bemidji," he said.

CFO Andrew LaFrence said the company estimates the Blue Earth closing will result in a restructuring charge of $1 million to $1.1 million in the last three quarters of 2024, including estimated noncash impairment charges of $400,000 with the remaining costs consisting of payments to move equipment, shut down the facility, and employee retention.

Miller said Nortech is also reducing the square footage of its Maple Grove, MN, headquarters and engineering facility by almost 30%, which is primarily due to the company's hybrid remote work arrangements.