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Sanford closing; 355 jobs to be lost

Wednesday, November 12, 2008

(Photo)
Sanford, on Spring Place Road, will close in less than a year.
Nearly all of the 355 jobs at Sanford's pencil factory here will be gone and the plant will be up for sale within a year, officials said Tuesday morning.

"We're all devastated by this and our feelings go out to the employees and their families who will be affected by this," Marshall County Mayor Joe Boyd Liggett said.

Liggett and other local leaders were asked to meet with Sanford Operations Vice President Tim Mischiara and Human Resources Vice President Gary Hall. "We were told 268 jobs plus 87 temps" would be affected, the county mayor said of information from a meeting at the Chamber of Commerce early Tuesday.

"I had a bad feeling after the call that something like this might happen," Liggett said of his premonition Monday night. "Throughout the year, they have been making buyouts of employees."

Sanford's worldwide reorganization also cuts 175 jobs at its Shelbyville plant. It employs 300 people. Those jobs will be moved to Maryville in East Tennessee by the end of 2009, according to David Doolittle, a spokesman for Sanford's parent company Newell Rubbermaid Inc.

Employees will be provided "supplemental pay for up to 13 weeks," Doolittle said of the difference between what they've been paid and what they may receive in unemployment compensation benefits. "Health benefits also continue during that time."

The average hourly wage at the pencil plant here is $14.50, he said. Wages started at more than $11 per hour.

As for temporary workers, Doolittle said, "We use temps because we're in a seasonal business." There are more sales before school starts each year.

Full employment here may continue through the winter, he said, unable to give an estimate any closer than several months. Then, there will be a sharp reduction in employment that would continue until next November. Thereafter, there's a possibility that up to a couple dozen jobs may remain at the plant for some time into 2010.

Standard lead pencils, color art pencils and grease pencils with various colors have been made here. Similar products have been made at a plant in Bogotá, Columbia, for decades, Doolittle said.

During an interview in the Spring Place Road plant, the company spokesman said it's "premature" to say Lewisburg jobs are being eliminated in favor of foreign production.

"It could be overseas, but it has not been decided" where those pencils will be made, Doolittle said. "We will be ... dropping some lines of products."

Meanwhile, a new packaging center is to be built next to the Sanford distribution facility in Shelbyville. It's to employ more than 125 people by the time the Shelbyville plant closes.

Sanford employees in Lewisburg and Shelbyville were informed of the changes early Tuesday and sent home for the day with pay.

Sanford moved production of its Sharpie marker to Shelbyville in 2004 with a celebration on the public square including NASCAR driver Kurt Busch. Various Shelbyville signs were temporarily changed to read "Sharpieville."

The company says the reorganization will create "global centers of excellence" in Shelbyville, Manchester and Maryville. The Manchester operation may eventually prove to be the world's largest ink manufacturer, Doolittle said.

The Lewisburg plant was "running a fairly efficient operation, but it's underutilized," the spokesman said.

"Affected employees will have the opportunity to apply for open positions at the packaging facility and our other locations," the company spokesman said. Lewisburg employees will also have that opportunity.

Consolidating facilities and streamlining operations, allows Sanford to continue production in Tennessee and remain competitive, the company said.

Newell Rubbermaid's third-quarter profit dropped 68 percent. It forecast weaker-than-expected earnings for the rest of the year because of falling consumer spending. The company said it may need to re-evaluate plans to sell off some underperforming brands because of the global credit crunch that's keeping prospective buyers from getting loans to finance transactions.

"Our expectation is that it will take us longer to divest those businesses that we had hoped to divest," Chief Executive Mark Ketchum said. "We may eventually have to develop some alternative plans. We may not be able to divest, we may have to gradually exit from those the way we do our other businesses."

Doolittle said the company is focused "on helping affected employees find new employment, which is why we are announcing these changes well before most will be implemented." Sanford hired a Knoxville firm to help its employees with resumé preparation and retraining.

Lewisburg Industrial Development Director Terry Wallace said, "We'll do all we can to retrain them and bring industry in to help them get jobs. We'll be working with the Department of Labor."

Mike Wiles, the executive director of the local Joint Economic and Community Development Board, said he "contacted the Career Center with the Labor Department and they'll be trying to send a rapid response team here like they did when ICP closed."

Lewisburg Mayor Bob Phillips called the closing "another loss for us. This is like ICP (the heating and cooling unit factory). It's historic. I think it's been here since 1947 under different names. Several generations of families have worked there. It's sad, but it's time for us to pull together."