JTEKT North America, formerly Koyo Steering Systems, will close its electric power steering plant in Daleville, Virginia by February 2010, putting 260 people out of work.

Opened in 2001, Daleville has been hit hard by the declining auto industry and JTEKT's excess production capacity for power steering systems. Generally, the company says its plants are running at between 35% and 65% capacity.

JTEKT (5251R9N7) is a Tier 1 supplier of steering systems, driveline components and bearings to North American automakers. It has 2,400 people in North America at locations including 8 manufacturing plants in Virginia, South Carolina, Tennessee and Texas.

The Daleville factory will begin winding down operations in October; its equipment will be consolidated to the two other steering system plants in Tennessee and Texas. Daleville workers may also be offered the opportunity to transfer to the Tennessee or Texas plants.

Workers will reportedly receive 13 weeks pay, extended medical insurance for 3 months after the plant closes, and added monthly incentive pay during the shutdown period.

Michael Bowers, JTEKT VP of Operations, said: "Automotive will recover, but that recovery is expected to be prolonged and the Company's business situation doesn't allow it to wait. To ensure long-term competitiveness and business stability for our team members and customers, a very difficult decision had to be made to eliminate excess capacity and adjust to weakened sales."