Private equity’s influence in U.S. manufacturing

Private Equity in Manufacturing

In the first quarter of 2026, private equity firms acquired stakes in more than 100 US-based companies with at least 500 employees. Manufacturing firms represented 16% of these deals, the second largest sector, coming after only Professional, Scientific, and Technical Services. In a conversation with Forbes, author Jeff Leimbach argued that the private equity emphasis on making quick returns is “a serious problem” for the sector, as manufacturing

“companies thrive on long timelines—planning and investing for the next decade, not the next quarter. They need time to train workers, upgrade machines, and develop new products. Private equity can’t wait that long. So corners get cut. Equipment upgrades are put off. Maintenance gets delayed. Engineering and training teams are downsized. Instead of being part of a healthy, long-term system, the company becomes a tool for squeezing out quick profits.”

To generate returns for investors, private equity firms aim to make the company more profitable by increasing efficiency (eliminating “unnecessary” positions), lowering costs (using cheaper products or labor), or reducing competition (consolidating the market through acquiring smaller companies). Private equity has deployed all of these tactics in the manufacturing sector.

Market Consolidation

Serial acquisitions (or “roll-ups”) are a common strategy in the private equity industry. Private equity firms buy up multiple companies in the same industry segment and merge them under one corporate umbrella. These transactions can allow firms to take advantage of economies of scale; they can also lead to less competitive markets in the sectors in which private equity operates, ultimately harming various stakeholders through higher costs and decreased quality of goods and services. This strategy also helps private equity portfolio companies to fly under the Federal Trade Commission radar – by acquiring small companies that fall under the typical FTC review threshold ($133 million), firms can accumulate market power with little scrutiny. By the time regulators notice, it may be too late.

In April 2025, U.S. Senators Elizabeth Warren (D-Mass.) and Jim Banks (R-Ind.) flagged this trend, launching a bipartisan investigation into private equity’s consolidation of fire truck manufacturing. According to their analysis, American Industrial Partners (AIP) portfolio company REV Group controls one third of the market, the largest of any company, while independent companies represent just 20 percent. Firefighters report “delivery delays, defective parts, and price increases” as a result of this consolidation. While truck demand has increased, REV Group decreased its production by one third, with delivery times nearly doubling. Outdated equipment leads to greater potential for unsafe conditions for firefighters and the people they serve. In a letter to the International Association of Fire Fighters, Warren and Banks accused private equity of “padding shareholders’ wallets at the expense of public safety.”

In February 2026, Los Angeles County sued AIP and REV Group for the damage done to the local Fire Department and taxpayers through “highly concentrated and oligopolistic markets.” The lawsuit claims that REV Group intentionally reduced supply by closing plants in 2022, and later raised prices by 50 to 100 percent. The closures in Pennsylvania and Virginia lead to at least 380 job losses. The cities of La Crosse, Wisconsin and Augusta, Maine have also filed lawsuits against AIP and REV Group for price inflation. All lawsuits are ongoing.

Recent Layoffs and Closures

Minnesota Manufacturers
In April, workers at two private equity-owned Minnesota drill bit manufacturing plants were notified of impending layoffs due to permanent closures. Walter Surface Technologies, a portfolio company of private equity firm ONCAP, submitted a notice that 77 workers in Chisolm and Hibbing would lose their jobs by August. According to the Worker Adjustment and Retraining Notification Act, the company was required to notify employees at least 60 days in advance. The notice did not say why the company decided to close the plants. 

Triumph Twist Drill (Triumph) was founded in 1952, and Minnesota Twist Drill (MTD) followed in the next decade. MTD, based in Chisholm, acquired Hibbing’s Triumph Twist Drill in 2009, though the company began to operate solely under the Triumph brand name. The company continued to grow after the acquisition, hiring new people and peaking at more than 150 employees, all of whom received extra pay from profit sharing. Walter Surface Technologies later acquired the combined company in 2020. MTD is Chisholm’s second largest employer.

Walter is based in Quebec, Canada, and operates twelve manufacturing brands. ONCAP, the private equity segment of Canadian asset manager Onex, acquired the company in 2018. Since then, the company has made eight acquisitions. Walter most recently acquired German company Hermes Schleifmittel in December 2025, just months before Walter submitted the WARN notice. As of May, Walter no longer lists Triumph products on its website, and has removed Triumph from its list of brands.

Walter touts “a long-term growth strategy driven by innovation and strategic acquisitions,” referring to the eight acquisitions as “successful integrations.” Though current company officials have yet to talk to the press, a manager toldThe Chicago Tribune in 2025 that tariffs imposed by the Trump administration that impacted company imports and exports led to “complete and utter chaos.” After Walter acquired the company, MTD began to export most of its products to Canada. In early 2025, Canada countered US tariffs with its own, increasing costs for MTD and other Walter brands. Furthermore, the company decided to stop manufacturing the majority of its steel blanks in-house, increasing Chinese imports from 25 to 100 percent. This overreliance on Chinese goods, likely in an effort to cut costs in the short term, made the company particularly vulnerable to foreign policy shifts.

ONCAP and Onex have been involved in bankruptcies and major restructuring over the past few years: medical imaging company CareStream, discount supermarket chain Save a Lot, and Hopkins Manufacturing in Emporia, Kansas. ONCAP owned Hopkins from 2011 to 2023. Less than two years after the firm sold Hopkins to another company, the manufacturer entered bankruptcy. Though firms may be able to offload a company before bankruptcy, common private equity practices like high debt loads, sale leasebacks, and capacity reductions can lead the company to insurmountable financial challenges soon after. Hopkins, in Emporia since 1953, closed the plant and laid off more than 100 workers after failing to find a buyer.

Refresco
Refresco is the world’s largest independent bottling company, with facilities that mix, bottle, and distribute beverages for companies like Pepsi, Tropicana, and Gatorade. The Dutch company operates in 14 countries, with more than 5,000 employees in North America. Private equity firm KKR acquired the company in 2022 from PAI Partners; since then, Refresco has taken over ten companies.  In April, Refresco issued a WARN notice for a facility closure in Carlisle, Ohio, laying off 63 people.

In the notice, Refresco’s Human Resources Director wrote that the company decided to close the facility “after extensive review of various factors related to Refresco’s manufacturing operations and network; ceasing production at this facility was because of the needs of Refresco’s customers as well as high operating costs.”

Refresco did not explain what these  high operating costs were. In late 2025, OSHA found that a worker at the plant suffered an amputation due to hazardous conditions. The company settled and is required to pay $10,000. OSHA records show another complaint related to an amputation in 2024, though the company was not issued any citations.