Ottobock, a private German prosthetics manufacturer that has had operations in Minnesota since 1958, is closing its North American regional headquarters, its fabrication operations and its distribution center in Plymouth, and moving about 200 jobs to Salt Lake City; Austin, Texas; and Louisville, Ky.
The moves will take place throughout the year and are designed to gain efficiencies as the company consolidates operations worldwide, said Brad Ruhl, president and CEO of Ottobock's U.S. health care division. For example, putting fabrication operations with manufacturing will help the company better meet the needs of its patients, Ruhl said.
Most Minnesota employees will be given the option to relocate, Ruhl said. Those who do not will get severance packages and outplacement assistance.
"What we are most focused on is making sure we are taking care of our employees," he said.
Karen Lundquist, director of communications for Ottobock's North America operations, said employees were told of the impending move last week. The company is not moving any sales functions out of Minnesota, she said.
Still, Lundquist said, officials understand that it will take time for workers to absorb the news. "Obviously, every time people's lives are involved, it's a big deal," she said.
On Monday, the Utah Governor's Office of Economic Development announced that Ottobock is expanding its existing manufacturing and research and development center in Utah.
"The international reach of Ottobock HealthCare strengthens and diversifies Utah's life sciences and composites sectors," said Spencer Eccles, the office's executive director. "Utah is a destination for global business expanding in the U.S. With this expansion, the company will find our multilingual and productive Utah employees unrivaled by any other workforce around the world."
The company was founded in Germany in 1919 and began operations in Minnesota in 1958, followed by a Canadian branch in 1978. Ottobock makes prosthetic devices, but also offers other products and services, including mobility and seating systems, custom orthotics and orthopedic devices. Ottobock is headquartered in Duderstadt, Germany, and employs more than 7,000 people worldwide.
"The functions that will relocate and merge with current operations in Salt Lake City, Utah will take advantage of our existing infrastructure and build synergies within manufacturing to better support evolving policy and procedure compliance," said Andreas Schultz, president and CFO of Ottobock North America.
Ottobock officials said they expect to add more than 80 new jobs in Utah in the coming years, 55 of which will be contracted with the state to pay a minimum of 125 percent of Salt Lake County's average wage including benefits. The company will make $1 million in capital expansion.
As part of its agreement with Ottobock, the board of Utah's Office of Economic Development approved tax credits of up to $392,019.