After
45 years, Vernay’s Plant 3 will close its doors
When the last 10 workers in Vernay Laboratory’s Plant 3 finish their
day of V-ball production tomorrow (Friday) at 3 p.m., the company’s
largest local plant will close its doors for good.
Next month, the company
will also begin marketing its Dayton Street facilities and its 46 acres
of farmland on the northwest corner of Dayton Street and East Enon Road,
Vernay President and CEO Tom Allen said last week.
Plant 3 will be the
first local Vernay facility to shut down since the company announced in
June 2002 the closure of its Dayton Street facilities. The newest of the
three local facilities, Plant 3 was built in 1958 at a fraction of its
current size to produce Vernay’s first product, a wax expansion
thermostat that was used to monitor engine temperature in everything from
automobiles to tanks and airplanes in World War II. Since then the plant
has grown with three or four additions and focused mainly on producing
synthetic and black rubber parts for the automotive industry.
Last year nearly
200 employees worked on more than 30 molding presses in Plant 3. But in
the span of a year, 125 hourly workers have either been laid off or retired
while Vernay has relocated most of the machinery to prepare for the first
plant closure. In addition, the company has eliminated approximately 22
middle management supervisors and engineers in the process of moving most
of Plant 3’s production to its other plants in Georgia and South
Carolina. Of the 32 management personnel formerly employed in Yellow Springs,
only 5 remain in town and another 5 have transferred south, Plant Manager
Mike Maloy said.
According to Allen,
the company has already benefited from the cutbacks.
“Closing the
larger plant will have a positive effect, and we’re starting to
see encouraging signs from those reductions,” he said during an
interview last week. “The fixed costs and tax depreciations we won’t
see until we sell the building.”
Last year, when the
plant closings were announced, Vernay officials said the decision to shut
down the facilities was made to keep Vernay financially healthy. The company
also cited as reasons for the closures its desire to be closer to its
emerging customer base in the South; its excess manufacturing space in
North America; and Vernay’s required cleanup of its Dayton Street
property, where groundwater and soil contamination have been found.
Plans for Vernay
properties
Ultimately, Vernay
would prefer to sell all of its property on Dayton Street, Allen said.
But given the potential complications involved with the environmental
cleanup on and around the facilities, the company will first seek to lease
Plant 3 or the property, or both. Vernay will begin actively marketing
its property next month, Allen said.
Village officials
and members of Community Resources, the local community improvement corporation,
toured the plants and both properties two weeks ago to scout out a potential
location for a local commerce park, Sam Bachtell, a member of the Community
Resources board said. Community Resources began talks with Vernay early
this spring when Village Council, through the cooperative economic development
agreement (CEDA) it signed with the Miami Township trustees, charged the
group with securing property for a development. Council agreed to provide
up to $200,000 for this purpose.
Community Resources
is also considering 30 acres of the Pitstick farm just north of The Antioch
Company on East Enon Road for a development site. Both the Vernay and
the Pitstick properties are zoned industrial and are accessible to roads
and utilities, essential factors for a commerce park, Bachtell said.
Allen said that Vernay
has been open to selling its farm land for several years, but management
is now prepared to actively look for buyers.
Vernay intends to
work with the Village to find a business or developer that is an “appropriate
fit,” he said. “We understand it’s a fairly sensitive
issue with the building, and our corporate offices are going to be here
for a while so we don’t want it to create any adverse situations
for us.”
Vernay will begin
closing the smaller medical plant, Plant 2, on Dayton Street in the first
part of next year. The 43 remaining manufacturing jobs will be relocated
on a job-by-job basis, like in the larger plant, and closure should be
complete by this time next year.
The 55 management,
engineering and research employees will remain at headquarters on East
South College Street until an unspecified date, Allen said, though he
has said in recent months that the company may relocate its headquarters
when the environmental cleanup is finished, which could occur after 2005.
State of the workers
According to plant
managers, the process of moving local operations south has been relatively
smooth for the company as a whole. Maloy said he and personnel employee
Robin Thompson have been available to offer support and advice to the
workers.
“I’m
on the floor every day to talk to people, and they come in asking me what’s
going to happen, both salary and hourly people,” Maloy said.
Many Vernay employees
were surprised and upset last June when they were first notified of the
closing and the job cuts. Some who had put in over 25 years with the company
felt betrayed and several dozen left for early retirement. The company
then shifted its projected layoff schedule a few months later, and some
workers began to distrust upper-level managers.
But the schedule
has remained fairly steady over the last few months, and the plants have
remained open about six months longer than originally expected, according
to Vernay’s union representative Ralph Foster, who started out as
a worker in Plant 3 and has since become one of the small group of employees
still left in Plant 2.
“There’s
been no big surprises, we knew there would be ups and downs and that things
just change on [short] notice,” he said in an interview last month.
“I don’t think any of the union people hold any animosity
against management.”
Several employees
have spoken of their dissatisfaction with reduced retirement and benefit
packages, but Vernay managers think the process has been fair.
“We’ve
tried to provide as generous a package as we could possibly afford at
this time,” Allen said.
The company’s
perspective
Vernay still feels
the pressures of running an unprofitable North American operation and
a $7.5-million environmental cleanup, which led to the decision to close
the plants last year, Allen said. But, he said, Vernay could have done
things a little differently from the beginning.
“When these
environmental problems arose we needed someone that would view us as a
friend, and that did not initially happen,” Allen said. “We
could have chosen to work through this problem in a constructive and efficient
manner, but unfortunately we chose otherwise, and it had a very negative
effect on Vernay as a business.”
Then came the announcement
that the company was leaving town, which added a bitterness to an already
tenuous relationship with the community, he said. Though, he added, given
the country’s economic recession and Vernay’s customer base
shifting toward the south, the eventual outcome would have probably been
the same.
Allen said that he
accepts the risk involved when any business exists within a community,
but he said that the two should work through issues of safety and environmental
concern together.
“It looks to
me like the village has modified its approach and is attempting to do
better,” he said. “Yellow Springs couldn’t stand alone
as a business center without the support of the Dayton area and this isn’t
the cheapest location . . . but it certainly isn’t uncompetitive.”
—Lauren
Heaton
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