A permanent magnet electrical machine includes a stator having conductive windings wound thereon and one or more permanent magnets embedded in the stator. A magnetic keeper element is positioned on the stator so as to form a magnetic flux path with the permanent magnets, with the magnetic keeper element closing the magnetic flux path of the permanent magnets by providing a low reluctance flux path to magnetic flux generated by the permanent magnets. A vacuum pressure impregnation (VPI) process is performed on the stator to increase a thermal conductivity of the windings, with the VPI process including a curing step that is performed at a selected temperature. The magnetic keeper element sets an operating point of the permanent magnets to an internal flux density level above a demagnetization threshold associated with the selected temperature at which the curing step is performed.