December 16, 2004

Second Vernay plant closing in January

By Diane Chiddister

Vernay Laboratory’s second Dayton Street plant will close at the end of January, Vernay president and CEO Tom Allen said in an interview.

Earlier this year, the company had said that the plant would begin to shut down in November.

Vernay’s Plant 2 manufactures rubber parts for the medical industry “or other customers that have unusual cleanliness demands,” Allen said.

Although at one time about 60 people worked at the plant, it now employs 16, who will be laid off next month. Those still employed at Plant 2 are hourly workers who have the most seniority with the company.

At its peak in Yellow Springs, Vernay employed between 500 and 600 people in its two Dayton Street plants and was one of Yellow Springs’ largest employers. Founded in the 1930s by Sergius Vernet, Vernay manufactures precision rubber products, largely for the automotive industry.

In 2002 the company announced that it was planning to close its two Yellow Springs plants and relocate its production facilities to plants in Georgia and South Carolina. At the time, company officials linked the move to a changing customer base, excess manufacturing space in its North American facilities and the demands of a U.S. EPA cleanup effort at the Dayton Street site, where contaminated groundwater and soil have been found. Contaminated groundwater has also moved off the site, onto neighboring properties.

Vernay’s larger Dayton Street plant, Plant 3, laid off people gradually, and finally closed in summer 2003. According to Allen, that plant’s business has been largely relocated to Vernay’s Georgia manufacturing plants.

The company’s Griffin, Ga., plant, which Vernay built in 1980, currently employs about 100 people, while its Milledgeville, Ga., plant, opened in 2000, employs about 65, Allen said.

The company has no plans to relocate its management staff, which is the last of the company’s presence in Yellow Springs.

That staff, including those in the corporate office, research and development, accounting and sales, are located in the company’s original facility on East South College Street. Currently, about 40 people work at the management office, Allen said.

Vernay’s management team will remain in Yellow Springs due to the potential cost of relocating and to the probability that several longtime employees on the staff, who are close to retirement, would choose not to move.

“There are quite a few senior people who we would lose right now if we moved,” Allen said.

Overall, the company is doing well, according to Allen, who said, “I’m really upbeat about our prospects.”

Worldwide, the company’s sales have remained steady the past several years, according to Allen, who declined to give specific figures. While sales in North America have declined due to the growing trend of the automobile industry to outsource manufacturing components, Vernay has made up that loss with increased sales in Europe and Japan, Allen said.

Currently, the company employs about 550 people worldwide, with manufacturing plants in Yellow Springs, Georgia, South Carolina, Holland and Italy and sales offices in Japan, Singapore and Brazil.

Vernay’s business in Japan and in Europe have both doubled in the past five years, Allen said, and the company projects an overall sales increase in 2005.

“It’s difficult to survive as a small semi-privately owned entity in today’s business world,” said Allen, noting that the company has “done a good job differentiating sales with engineering service and attracting new customers.”

Environmental cleanup efforts, under the auspices of the U.S. Environmental Protection Agency’s Resource Conservation and Recovery Act program, continue at Vernay’s Dayton Street site. The company has settled two lawsuits from neighbors, both for undisclosed amounts. Under the terms of the suits, Vernay agreed to give oversite of its cleanup to the U.S. EPA and a group of neighbors who filed the court case.

Vernay has paid millions of dollars in its cleanup effort, according to Allen, who said that one third of that amount has gone for the investigation and cleanup and two thirds has been used to pay for the legal process.