VOL. 123 | NO. 247 | Thursday, December 18, 2008
Cooper Tire to Close Albany, Ga., Plant
By CHUCK BARTELS | AP Business Writer
TEXARKANA, Ark. (AP) - With tax incentives and worker concessions, four cities in four states vied to keep their Cooper Tire & Rubber Co. plant open after the Ohio-based company said the weakening economy would cause it to shutter one of its U.S. plants.
Albany, Ga., lost out and 1,400 employees will be out of work, the company announced Wednesday. Meanwhile, workers in Texarkana, Ark.; Tupelo, Miss.; and Findlay, Ohio; were relieved.
"Thank God that it's all over, and hopefully this industry will pick up and we can go forward," said David Boone, president of the Texarkana plant's Steelworkers Local 752L.
"We're happy, but we're sad at the same time. We hate to see anybody lose their jobs," Boone said.
In Texarkana, the union voted to scuttle its current contract in favor of one in which workers would freeze salaries and make other concessions. Texarkana has 1,400 workers, Findlay has 1,100 and Tupelo has 1,200. The Texarkana and Findlay plants are unionized; the Tupelo and Albany plants are not.
Alison Tyrer, a spokeswoman for the Georgia Department of Economic Development, said state and local officials in Georgia offered an incentive package for Cooper Tire totaling about $32 million. The package included tax credits, low-interest loans, tax abatements and quick start services, she said.
Mississippi offered $30 million to keep the Tupelo plant open, while a spokesman for Arkansas Gov. Mike Beebe said Cooper Tire would received $2 million from the governor's quick action closing fund – money that's set aside to attract and retain businesses. A union official said Cooper wanted to take $36 million in costs out of the Texarkana plant, and that the union was able to get close to that figure.
"We couldn't match what some of the other states were doing in terms of amounts," Beebe said. "One of the things we have to do is we have to balance, if you will, and a lot of people don't like to hear this particularly if it's their own job, but we have to balance for the whole state what the incentives really are versus what the return is overall to the taxpayers.
"Sometimes that prevents us from being able to offer as much as other states do. We were nowhere close to being able to do what Mississippi did."
Ohio also offered incentives to keep the Findlay plant open.
"At a time when the economy is punctuated by bad news I am very pleased with the good news that Cooper Tires had made the decision to keep its Tupelo plant open," Mississippi Gov. Haley Barbour said.
Workers were told in October that the company was facing higher costs and shrinking demand, and that Cooper had to make a dramatic cut. The company studied the plants while workers and their communities hoped Cooper would spare them.
Cooper said in a news release Wednesday that it would absorb $150 million to $175 million in restructuring charges, and 50 percent to 60 percent would be non-cash charges. The company said it would save between $75 million and $80 million each year after the closing.
Cooper said some of the savings would be realized in 2009 as production moves to the three remaining plants.
Cooper Chief Executive Officer Roy Armes said the company has been hurt by lower priced imports and by softening U.S. demand.
"This was a difficult decision and we regret the impact it will have on our employees in Albany and the surrounding community," Armes said. "The detailed study we performed was fair, objective, and conclusive that we needed to consolidate our capacity and close one of our U.S facilities. The government and community agencies were actively engaged and involved and offered a high level of support, but the final outcome was clear."
The company told workers Wednesday that the three remaining plants would move to around-the-clock production, seven days a week, and that staff may be added. The company said it would take 12 months to close the Albany factory.
Union workers at Texarkana on Saturday voted 84 percent to 16 percent to adopt their new contract. The same workers went on strike for a month in 2005 over health benefits, returning to work after a narrow majority accepted the company proposal.
About a year later, Cooper Tire converted the factory to a "flex" plant, which trimmed the worker count from 1,900 and made the plant more adaptable to increases and decreases in production.
Boone said he expects the Texarkana plant to convert back to a continuous operation plant once work is moved from Albany. He said the plant will likely hire between 250 and 300 workers.
Residents in Texarkana greeted the news with relief, with any joy countered by thoughts of the workers in Albany.
"Hallelujah for that!" said John Loomis, owner of Loomis Farms, a small business that serves lunch in downtown Texarkana and sells gourmet products. "It (Cooper Tire) would have closed, it would have been devastating for the economy. It's very sad for Albany."
The Texarkana plant is just a couple of miles from downtown, and Loomis counts Cooper workers among his customers. He said the plant keeps numerous small businesses going and, if those would dry up, a good portion of his business would go with it.
Steve Layton, a FedEx Corp. employee, said Cooper Tire is a key customer, taking deliveries of items ranging from yarn to machinery and using the Memphis, Tenn.-based hauler to move its products.
"Without (Cooper), we can't deliver to them," he said, standing outside a Sam's Club warehouse store on a misty, chilly day under gray skies. "We'd probably lose 20 customers."
After the union met on Friday, Boone met with state and local officials about incentives that would be offered to Cooper.
Boone said Wednesday he was bound by a confidentiality agreement and couldn't discuss the terms.
Workers at the Findlay plant overwhelmingly approved a contract last week that will cut their pay and benefits by $30 million over the next three years.
The move likely saved their jobs, said Rod Nelson, president of United Steelworkers Local 207L.
"We feel lucky, but our hearts really go out to the community and the families down there in Albany," he said. "There's nobody celebrating here."
About 1,100 people work at the Findlay plant, which is Cooper's oldest. It's also one of the largest employers in the northwest Ohio city.
Cooper Tire shares were unchanged at $6.01 in afternoon trading.
Associated Press writers Andrew DeMillo in Little Rock, Ark.; Kate Brumback in Atlanta and John Seewer in Toledo, Ohio, contributed to this report.
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