Propex closing
Published 8:00 am Saturday, June 8, 2013
- Extrusion line assistants operate equipment that packages polypropylene yarn to be woven into Propex’s Geotextile fabrics in this April 2012 photo. Propex is closing its Nashville plant.
Propex Operating Company, a global woven geotextiles corporation, will shut the doors on its Nashville factory by the end of the year, CEO Michael Gorey announced Friday, leaving its 180 employees looking for work.
The company will consolidate the Nashville operation into a similar plant in Hazlehurst, effectively shrinking the operation down to 145 jobs and relocating them about 75 miles away.
The closure comes as grim news to Berrien County and the City of Nashville, which counts this loss as the third major closure in less than 10 days, said Berrien County Commission Chair Steve Sumner.
Fiber optics company Petroflex, an employer of more than 20, left Nashville recently, and the recent sale of Harveys Supermarkets will likely lead to the closure of its corporate office, which employs about 30.
Propex, however, is the greatest loss in recent memory for the county. The company will take with it a tax bill of around $100,000 per year and leave behind a vacant facility measuring more than 1 million square feet, as well as the equipment housed inside.
Propex has existed in Nashville since 1968, steadily growing and employing between 125 and 300 employees throughout its history, said Sumner, and the county is sad to see it go.
“This third decision to close a major facility is devastating to our economy,” Sumner said. “We had a public hearing on Tuesday for our annual budget, which will be voted on and approved next Tuesday. This year’s budget should not be affected; the loss of jobs is the critical situation.”
The annual tax bill of about $200,000 from Propex is evenly split between the Berrien County School District and the county government, but about half of that sum is levied on the property itself, which will remain. This represents a loss of about $50,000 each for county schools and government each year.
Still, added to the loss of other business in such a short amount of time has left the county scrambling to find its own programs and benefits to cut to keep its budget balanced.
“We have reduced our operating costs by over 15 percent in the last three years, including reduction of staff, re-negotiating every single contract in relation to health insurance and liability insurance and maintenance costs,” Sumner said. “Based on this news, we will have to sit down and we will review our complete budget for 2014 to determine any changes that can be or must be made.”
The company was a top-five employer for the Nashville area with a regional footprint crossing borders into Cook, Tift and other counties, and employing people with diverse abilities, said Crissy Staley, Berrien County Chamber of Commerce executive director.
“They’re a manufacturer, so there are jobs in the production line, managerial jobs, engineers, and in research and development,” Staley said.
The chamber has yet to make its plan of action to curb what the loss could do to the county’s business and industrial development reputation, according to Staley.
A private corporation, Propex did not include the chamber or the county in its discussion of the closure, but rather informed them of the decision after it had been made, leaving no room to negotiate incentives to keep the company in the area, Staley said.
“It’s not just a loss of jobs, but of general morale,” Staley said. “Back when the economy first turned sour, our tout was yes, our industries had laid off employees, but there were no closures. Now we can’t say that anymore.”
As is the effort with many rural communities and small cities in South Georgia, Nashville has worked diligently to recruit major industry to create jobs in the area. With the Propex consolidation, industrial recruitment could take a major hit, leaving Nashville fighting to save face and re-build a positive reputation.
If there had been another way, the company would have tried it, according to Gorey. Given the company’s own budget cuts across the board and extra-low capacity at the Nashville plant for a year, consolidation seemed the only way out.
“In 2011, we had quite a bit of defense work,” Gorey said. “The defense spending has evaporated, and it took a big chunk of our production out. The highway spending was part of the stimulus, and that has dropped 14 percent. There are just less projects.”
The company is re-positioning to create a larger presence in the mining industry, Gorey said. Propex products are used in highway construction, military equipment such as parachutes, and support for mineshaft walls.
The 1.4-million-square-foot plant in Hazlehurst has been running at 50 percent capacity. It makes sense to fold the smaller operation, which has deflated down to a meager 15 percent since defense spending cuts, into the larger one, Gorey said.
“We feel very, very bad about it,” Gorey said. “We very much appreciate the loyal dedication we’ve had over the years. Propex has been in Nashville for a very long time. We held on and held on and held on, believe me, but we’ve been suffering for a year. We spent a year trying to find a way to downsize it to a logical level to make it work, but it’s too big of a footprint.”
In spite of the efforts of the company and the workers of the plant who worked to keep it open, the economy “left no choice,” Gorey said. Over the next six months, the company will offer the 180 current employees first pick at the 145 jobs in Hazlehurst, but given the distance, Gorey believes many will choose to stay.
“We’re very sorry for the employees, the families and the community. We wish there was another way to make it work,” Gorey said.
Despite the blow to the local and regional economy, the county remains stoic in its efforts to weather the economic storm and confident it will bounce back.
“No, it’s not the end of Nashville,” Sumner said. “The number one industry in Berrien County is agriculture, and it will continue to be the number one industry. It’s a difficult loss to take, and they’re going to be difficult jobs to replace, but we have an extremely well-trained work force. It’s just a matter of finding a company that matches up with our work force that we can recruit to this area.”