In a significant blow to the local economy, Southington-based manufacturer Rex Forge has announced its impending closure, resulting in the layoff of 103 employees. The decision comes after the company's sole customer, Dana Corp., unexpectedly terminated its contract on January 29, 2025.
Rex Forge, a longstanding supplier to the automotive industry, has been a fixture in Southington since its founding as the Atwater Manufacturing Co. in 1867. The company specializes in producing hot metal forgings and has operated continuously in the town for over a century.
The termination of the contract by Dana Corp. was both unexpected and unforeseen. Colleen Hedges, Rex Forge's controller, expressed the company's shock in a letter to the Connecticut Department of Labor, stating, "Rex Forge had every reason to believe and expect, from the daily actions and communications with Dana, that future business would continue." She further noted that without the Dana contract, which represented the sole business for Rex Forge, the company has no ability to continue operations and will be shutting down permanently.
The layoffs are scheduled to occur between February 10 and February 24, 2025, affecting all levels of the organization, including the CEO, COO, and various operational staff such as forgers, trimmers, and sprayers.
This development underscores the risks associated with a business model heavily reliant on a single customer. The sudden loss of its only client has rendered Rex Forge's operations unsustainable, leading to its closure and the displacement of its entire workforce.
The closure of Rex Forge not only impacts its employees but also serves as a cautionary tale for businesses about the importance of diversifying their customer base to mitigate such risks.