November 13, 2003


Vernay delays closure of Plant 2

Vernay Laboratories has changed its schedule to close Plant 2, the remaining facility on Dayton Street, slightly extending employment for the last 43 manufacturing workers who remain in Yellow Springs, Gregory Gearhardt, vice president of the company’s North American operations, said on Monday.

Vernay still plans to eventually close Plant 2, but layoffs are not likely to begin until November 2004, and the plant will probably remain open until February 2005. In the spring, company officials had said that the plant would be closed by mid-2004.

“We’re slowing the process down at this point,” Gearhardt said.

He attributed the delay to a marketing study and an analysis of the costs to relocate the plant’s operations, which the company is “wrapping up.”

The results of the study, which are available but not ready to be released, will help Vernay determine where the best market is for the medical manufacturing currently in Plant 2, he said. The financial study will also show how much the move will cost and when the company might be able to afford it.

Gearhardt said that he expects the company’s management team at the end of this year to recommend where Vernay should move the factory. From January to July 2004 the company will be in a project planning phase to decide the details of relocating and restarting elsewhere.

Part of the reason for the plant closing delay is that Vernay funneled some of its available funds to new product development in injection molding at its Milledgeville, Ga., facility, he said.

Vernay announced the closure of its Dayton Street facilities in June 2002, saying both plants were expected to be closed by the middle of 2003. Since the announcement was initially made, however, those plans have changed numerous times.

Plant 3 closed six months behind schedule, at the end of June 2003, and Plant 2 will likely close almost a year and a half later than originally announced.

Vernay’s headquarters and research facilities are expected to remain in Yellow Springs at least until 2005, Gearhardt said.

Vernay initiated the plant closures to respond to its shifting markets, excess manufacturing in North America and the environmental cleanup around the Dayton Street facilities. Company officials also said that closing the plants would help keep Vernay financially viable.

Vernay has said that closing the plants would help facilitate the environmental cleanup, which Vernay is undertaking through the U.S. Environmental Protection Agency. The company is conducting groundwater samples on and around the facility, and is cleaning contaminated groundwater through two capture wells, according to a report released by the U.S. EPA in October on the process. The report also said that the company does not need to conduct an “interim cleanup” of contaminated soil at this time.

When Vernay announced the plant closures, the company had said that it was moving its Yellow Springs manufacturing operations to its other U.S. facilities in Georgia and South Carolina.

Since the company began shutting down the plants, almost 150 Vernay employees have lost their jobs or retired.

Gearhardt notified the remaining workers last week about the delay in the plant closure and said that the schedules for both closing and layoffs were subject to change.

“I committed to providing them with periodic updates,” he said. “If the business slows out of this plant, we may have to lay off a few people.”

For the workers who will remain in the plant up to a year longer than expected, the discomfort with being precariously employed is no different than it has been since the closure was initially announced, union leader Ralph Foster said on Monday. The remaining workers are those with the most seniority and the closest to being able to retire. But retirement is not likely for most of them if Plant 2 closes on its current schedule, he said.

“People feel the same thing as they did before, ‘maybe we’ll have some time left, maybe we won’t,’ ” Foster said. “It moves you closer, but the ultimate goal is not going to be the 30 years.”

—Lauren Heaton