SKF Shuts Monterrey Plant, Shifts Output to Puebla

Swedish industrial group SKF announced a strategic restructuring of its North American manufacturing footprint, confirming the closure of its factory in Monterrey and the relocation of production capacity to existing facilities in Puebla and La Silla, Nuevo Leon. The decision,—driven by a corporate separation of business units and slower-than-anticipated growth in the electric vehicle (EV) sector—will result in the elimination of approximately 390 jobs.

The manufacturer of bearings, seals and lubrication systems cited a misalignment between current market demand and the Monterrey site’s cost structure as the primary driver behind the move. In an official statement, the company noted that the facility had become disproportionate to its operational needs following an internal restructuring.

“Following the decision to separate the businesses, together with lower-than-anticipated growth in electric vehicles, the Monterrey facility exceeds the operational requirements of each individual business,” the company said.

Strategic Realignment and Market Shifts

The Monterrey plant, inaugurated in October 2023 following an investment of approximately US$73 million, was originally designed as a high-capacity hub to support the North American automotive industry’s transition to electrification. The site operated under a shared model, serving both industrial and automotive divisions.

However, SKF reported that the separation of its automotive and industrial businesses rendered the shared-complex model redundant. By reconfiguring its footprint, the group aims to enhance competitiveness in a market where the EV transition has slowed.

“The factory in Monterrey will become redundant, and manufacturing capacity will be relocated to strengthen SKF’s automotive operations in Puebla, as well as its industrial operations in La Silla, also located in the Monterrey area,” the company confirmed.

According to SKF, the relocation is intended to improve profitability and support a more agile production model, while preserving the technical capabilities needed to respond to future increases in demand for electrification-related components.

Labor and Economic Impact

The closure of the Monterrey site will result in the loss of approximately 390 jobs. To partially offset the impact, SKF expects to create around 100 new positions through the expansion of its facilities in Puebla and La Silla.

The restructuring will also involve a significant one-time financial charge. SKF estimates consolidation costs of approximately SEK 500 million (US$53.7 million), which will be recorded in its second-quarter 2026 financial results and has already been incorporated into its full-year guidance as a non-comparable item.

SKF’s Monterrey facility was the company’s fourth plant in Mexico, specializing in deep-groove ball bearings for the automotive sector and tapered roller bearings for industrial applications. Despite the closure, SKF maintains a global presence across 130 countries, supported by a network of 17,000 distributors and a workforce of approximately 40,000 employees.

Company leadership framed the decision as a necessary adjustment to evolving market conditions. “Our products are everywhere in society. Wherever there is movement, SKF solutions can be used,” the company noted.

Industry analysts view SKF’s exit from Monterrey as indicative of a broader cooling phase in the global automotive sector. As several manufacturers reassess aggressive electrification timelines, suppliers are increasingly shifting toward more flexible, capital-efficient production models.

While the transition to sustainable mobility in North America remains a long-term priority, SKF’s near-term focus has shifted toward operational efficiency and cost stabilization. By consolidating automotive production in Puebla and industrial operations in La Silla, the company aims to preserve its technological capabilities while reducing exposure to excess capacity.

SKF concluded that the restructuring is essential to “strengthen its competitiveness in North America” and better position the company to navigate a slower energy transition, without compromising its ability to scale production should EV demand accelerate in the future.