Memphis manufacturer RMS Surgical will close, idle 58 workers

Longtime Memphis manufacturer RMS Surgical will lay off 58 employees and permanently close its plant by Dec. 31.

RMS owner Cretex Companies Inc. is shifting output to a larger plant at Anoka, Minnesota, said Steven Ragaller, Cretex chief financial officer.

The Memphis plant filed a notice with Tennessee’s labor department on Wednesday disclosing the layoffs.

“We’re consolidating facilities. It’s part of a natural change in manufacturing strategies,” Ragaller said, adding that “as manufacturing technology improves we’re able to leverage capacity more efficiently.’’

Cretex, a 1,600-employee conglomerate based in Elk River, Minnesota, bought RMS in 1982. Minnesota-based RMS arrived in Memphis in 2001 with the acquisition of Multi Source Medical, an instrument manufacturer founded in the city in 1998.

Closer to its head offices, Cretex also bought an Anoka manufacturer, Meier Tool & Engineering, in 2009. Meier specialized in making miniature components and sub-assemblies for medical, aerospace, defense and electronics companies.

In Memphis, RMS makes metal components for orthopedics suppliers in the United States and the Memphis area, where medical device makers employ about 17,000 people.

The closings come at a time when the jobless rate in metropolitan Memphis has surged with widespread layoffs, particularly among retailers, hotels and restaurants, related to business slowing amid the coronavirus pandemic. Hospitals also have been pressured financially as people postponed non-critical surgeries and procedures.

The jobless rate measured 11.9% in June when nearly 74,000 residents in the nine-county metro area were on the unemployment rolls.

The layoffs were revealed in a WARN notice filed with the Tennessee Department of Labor and Workforce Development. Federal law requires companies with 100 or more employees alert communities at least 60 days in advance of future mass layoffs of 50 or more workers.