Insurance Helps Wis. Manufacturer Falk Reopen After Deadly Blast

August 13, 2007

Falk Corp.’s parent company said the mining equipment maker will return by September to production levels it reached before the December blast that killed three workers.

Milwaukee-based Rexnord Corp. made the comments in announcing its quarterly earnings.

The blast at the Menomonee Valley plant on Dec. 13 also injured 46 workers. An underground propane pipe ignited in a large storage building, scattering debris hundreds of yards, damaging nearby buildings and shaking windows for miles.

Rexnord executives said their $2 billion insurance policy has covered tens of millions of dollars in losses and reconstruction at the plant should be finished by the fall.

Rexnord had received $47 million in cash advances as of June 30 from its insurers for damage related to the explosion. Of that, $12.5 million was paid for interruptions to Falk’s business, Rexnord reported.

George Moore, Rexnord’s chief financial officer, said the company expects to finalize insurance claims in the next few months.

Falk and parent company Rexnord Industries make gears, couplings, chains, bearings and other industrial components, many of which are using in mining.

Production is nearly back up to pre-blast levels, the company said.

It had had to delay orders for about 500 large engineered gear drives following the explosion. Only eight are yet to be shipped.

Rexnord CEO Robert Hitt said the company expects to recover the majority of its losses from the accident.

“We are a more resilient company from having dealt with such adversity,” Hitt said.

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