Sanford regrouping to cost Shelbyville jobs

Sanford Corp. manufacturing facilities on Sharpie Way sat idle today after employees were given the day off following the announcement this morning of a company-wide reorganization. The reorganization will shut down the facility permanently by the end of 2009, affecting 300 employees. (T-G Photo by David Melson) [Click to enlarge] [Order this photo]

Sanford Corp. announced a major worldwide reorganization of its facilities today that will result in a net loss of 175 jobs for Shelbyville.

Shelbyville manufacturing operations, which now employ 300 people, 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. The company's Lewisburg facility, which employs 270, will close by the third quarter of 2009.

At the same time, said Doolittle, a new packaging center will be built next to the Sanford distribution facility on Railroad Avenue in Shelbyville, which will employ more than 125 people. That packaging center is scheduled to be open by the time the manufacturing facility closes. The distribution facility will not be affected.

Sanford employees in Shelbyville were informed of the changes early this morning and then sent home for the day, with pay.

Local government offices were closed today for the Veterans Day holiday, making it difficult to get immediate comment.

Although the Times-Gazette received reports of a police presence, Doolittle said "any law enforcement is there strictly to direct traffic."

Sanford moved manufacturing of its flagship Sharpie permanent marker to Shelbyville amid great fanfare in 2004. A celebration was held on the courthouse square featuring NASCAR driver Kurt Busch, and various city signs were temporarily changed to read "Sharpieville" instead of "Shelbyville." Now, that production, along with production of other markers and highlighters, is being moved to Maryville.

The manufacturing facility spent decades producing pencils, for Empire Pencil Corp. and later Berol Corp., before being bought by Sanford. After the conversion from pencil production to marker production, the company asked the city to change the name of the street where the plant is located from "Pencil Street" to "Sharpie Way."

The company says the reorganization will create "global centers of excellence" in Shelbyville, Manchester and Maryville.

"[W]e will consolidate marker manufacturing in Maryville by the end of 2009," said Doolittle in a news release, "impacting approximately 300 employees. However, we will build a new packaging center of excellence by building a new specialty packaging facility in Shelbyville, expected to employ over 125 workers, to be co-located with our existing distribution center there that employs 150. Affected employees will have the opportunity to apply for open positions at the packaging facility and our other locations."

The announcement is the second piece of bad employment news the community has gotten in recent weeks, following the announcement last month that Summit Polymers would close its Shelbyville plant by January 2009, leaving 263 jobless.

Maryville will become a "center of excellence" for Sanford's markers, highlighters and dry erase products. Approximately 150 jobs are expected to be created in Maryville as production transfers from Shelbyville and Lewisburg by the end of 2009.

"These newly created centers of excellence will enable us to continue to offer high-quality products while operating more efficiently and better aligning our manufacturing process with our strategy, current product mix and consumer demand," Doolittle said in the release.

Sanford says the announced closures will affect about 445 jobs in Tennessee by the end of 2009, leaving the company's statewide employment at 800 to 900.

"In recent years, we have made adjustments to our product lineup and are exiting some categories where consumer demand or profits were too low to continue production," said Doolittle. "This has resulted in our Tennessee facilities being significantly underutilized. By consolidating these facilities and streamlining our operations, we can continue to cost-effectively manufacture quality products in Tennessee. Put simply, it is necessary for us to take this action to remain competitive."

Newell Rubbermaid said last month that its third-quarter profit skidded 68 percent, and it forecast weaker-than-expected earnings for the rest of the year because of falling consumer spending.

Newell Rubbermaid said it may need to re-evaluate plans to sell off some underperforming brands because of the global credit crunch that's keeping perspective buyers from receiving 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."

"We understand the impact these changes will have on all affected employees, their families and the communities of Lewisburg and Shelbyville," said Doolittle. "We explored many options before reaching this conclusion. Our focus now is on helping affected employees find new employment, which is why we are announcing these changes well before most will be implemented. We are hopeful that by the second half of 2009 the U.S. economy will be stronger, and impacted employees will be able to find comparable positions."

The company is offering job transition services, which includes resumé preparation, and is working to help arrange for additional transition benefits, such as continuing education. It has also promised supplemental unemployment pay based on an employee's years of service, to make up the difference between unemployment benefits and current wages.

-- The Associated Press contributed to this report.