U.S. plant closings in September, October

Former plant in Texas

Another 114 American plants closed or announced closings, this month and last. In September 2011, 56 plants closed. This month so far, it’s another 58.

Lockouts used to be frowned upon

The rate of closings is typical for recent years. The sectors in which plants closed are the usual ones. Metal products lead off, with 29 plants closing Sept.-Oct. Pulp and paper products follow with 18 plants closing in the same period. Food products follow in third place with 13.

The states losing manufacturing plants also follow a pattern typical for the past few years. Several states have made the list every time in Sept.-Oct., in Jon Clark’s Plant Closing News, which gathers and compiles this useful information—Florida, New York, Pennsylvania, Tennessee, and Wisconsin. Several states are making the list most of the time this fall, including California, Illinois, Washington.

Walker in Wisconsin

Causes for the closings vary somewhat.

• Among the companies closing plants, there were 25 bankruptcies in September 2011 and 28 bankruptcies in October. Many were in either metal products or printing.
• A number of the closings are moves to consolidate. Monterey Gourmet Foods, one of the world’s largest tofu producers, is closing its Washington State plant and relocating some employees to its other facilities in California. Signature Offset is closing its printing facility in Florida to consolidate its operations in two Mississippi locations. (Florida and Tennessee in particular tend to lose facilities right and left in consolidations.) Atrium Patio Doors is closing its plant in Greenville, Texas, and relocating manufacture to its facilities in Iowa.
• Some of the closings are companies moving facilities or jobs to Mexico or elsewhere abroad. Alpha Technology in Howell, Mich., is closing and moving manufacturing operations to Mexico. Baldwin Hardware in Reading, Pa., is now a division of Stanley, Black & Decker, which is moving manufacturing to Mexico.

Incentives to do harm

Contrary to what might seem likely, most of the plants are not closing in blue states losing their factories to profit-friendly red states. GOP governors might suggest directly or via Fox News that their states are ‘job-creating’. The Republican governor of Tennessee, to do him justice, actually seems to be trying to attract companies to his state. But statistically there are more plants closing in Rick Scott’s Florida, Scott Walker’s Wisconsin, and Bill Haslam’s Tennessee than in any blue state except possibly New York. With state population factored in, the preponderance of factory jobs lost in red states goes up.

Rick Scott

‘Right-to-work’ states have not fared particularly well in these hard times, either. Despite the fear tactics and intensive lobbying that cram ‘right-to-work’ laws through state legislatures, Alabama, Arizona, Florida, Mississippi, the Carolinas, Tennessee, Texas, and Virginia have all had further plant closings in September and October. The recent closings come on top of others in 2011 including summer. The month of June alone saw three plant closings in Florida, two in Alabama, four in Texas, one in Mississippi, four in Ohio, etc. The flip side of the same coin is that companies do not seem to be relocating en masse from progressive states to the most regressive ones, as has been feared.

A quick inference to be drawn from the numbers is that whack-job rhetoric is not a short cut to enticing industry into your state. Chris Christie, Kasich, and Walker among other governors have abysmal records on stimulating employment. Scorched-earth labor policy does not guarantee prosperity even in the short term; nor does offering extensive tax advantages and other deal-sweeteners to every company that calls. There is also a broader, long-range concern. Stiff the public, and working people, at your own peril: Companies that lay off too extensively, in the effort to get lean and mean, end up cutting into their own customer base.

Such observations are common sense.

Some of what is going on in Georgia, however, is mystifying. One of the companies cutting employees this month is biotech firm Dendreon. Plant Closing News announced Oct. 1 that Dendreon is cutting 117 employees at its plant in Union City, Ga. What makes this strange is that Dendreon just opened the cancer treatment plant recently, and it got FDA approval in the first half of 2011. The large (155,000sf) facility is located near the huge Atlanta airport. The company web site announces that “Dendreon is building out manufacturing facilities in Atlanta, Georgia and Orange County, California, and both are expected to provide additional capacity in mid-2011.”

Dendreon in Atlanta wins FDA approval