Des Moines Register
06-16-06
Plant's reversal costs Iowa 500 jobs
An expected expansion in Centerville scrapped; production ends in September
By WILLIAM RYBERG
REGISTER BUSINESS WRITER
An expansion at Rubbermaid's factory in Centerville appeared to be a sure thing
to Iowa officials last summer, but less than a year later the Atlanta-based
company has decided to close the 500-employee plant.
The closing is the latest in a series of factory shutdowns and job cutbacks at
Iowa factories, even though manufacturing jobs have increased by 4,800 in the
past 12 months, according to Iowa Workforce Development.
The shutdowns, largely in small and midsized towns, raise questions about
whether the change in Iowa manufacturing is caused by foreign competition,
outdated plants, labor costs or difficulty in finding employees, said Paul Lasley,
chairman of the Department of Sociology at Iowa State University. The issue
needs to be studied to determine whether state and local government can stem
the tide, he said.
"This appears to be symptomatic of too many plants. What's going on?" Lasley
asked.
Newell Rubbermaid of Atlanta announced Thursday that the Centerville plant
would end production in mid-September and that jobs would be moved to a
Rubbermaid plant in Winfield, Kan.
Terri Novotny, who works at the factory, said she was puzzled by the plant
closing. "We have high productivity and a lot of orders to ship out," she said. "It's
just unreal how much product they have stored up."
The plant makes plastic products such as outdoor storage sheds and garbage
cans.
The closing "didn't come out of the blue, but it's still a shock," said Joyce Bieber,
executive director of the Centerville Area Chamber of Commerce. Rumors that
the plant was in danger had been circulating in recent months, Bieber said.
Last summer, the story was different.
Local plant officials told community leaders in August that the parent company
had chosen the Centerville factory for a $10 million expansion, said Keith
Sherman, president of the Appanoose Economic Development Corp.
Among the incentives: state tax breaks worth up to $1 million. The project was to
include additional manufacturing equipment and was expected to create 20 jobs
paying $11.64 an hour.
Gov. Tom Vilsack said economic development leaders worked with the company
for more than a year on incentives designed to persuade the company to expand
in Iowa.
"We had made several proposals. We had actually gone as far as putting
together a contract, which is usually an indication of the conclusion of
negotiations," Vilsack said. "We actually sent the contract to the company, and it
was not returned."
Rubbermaid's leadership changed. The plant manager who announced the $10
million expansion was fired in February. Work never began. Those events raised
concerns about the plant's future, Sherman and Bieber said.
Vilsack said state officials tried to call Rubbermaid executives several times, "but
they were unable or unwilling to take the call."
Dean Kaster of Moravia, chairman of the Appanoose County Board of
Supervisors, said the company never asked for any incentives or help from local
officials. "We gave every effort we possibly could to keep in touch with them on
what their thoughts were, but it was really difficult to communicate with those
folks."
Joe Marotti, a Rubbermaid vice president based in Ohio, said a final corporate
decision on the Centerville expansion was never made.
He told the Associated Press that the savings attained through consolidating
production at the Kansas plant was so great that Iowa could never have matched
it.
"There was no way the state would ever be able to come up with the amount of
money we're saving by consolidating," he told AP.
Closing the Centerville plant will eliminate overhead cost for that facility, Marotti
said, and the Kansas plant has room to absorb the Centerville production.
Consolidating work in Centerville wouldn't have worked because the factory isn't
large enough, he added.
Centerville workers are being offered positions at the Kansas plant, but Winfield
is nearly 400 miles from Centerville.
Newell Rubbermaid is undergoing a three-year restructuring to close about onethird of its 80 factories and to eliminate about 5,000 employees from its 31,000member work force.
The global economy is a key element in Rubbermaid's reorganization and in the
loss of manufacturing jobs, economists and plastic-industry observers said.
Bill Testa, a senior economist with the Federal Reserve Bank in Chicago, said
rural areas in the Midwest are actually doing better at retaining manufacturing
jobs than metro areas are.
Globalization, however, has resulted in a "great churning of jobs," said Testa, as
manufacturers look overseas for cheaper labor. The result, he said, has been the
elimination of higher-wage manufacturing jobs in rural areas and the addition of
lower-wage jobs.
Lasley, the Iowa State professor, said the Centerville closing is another blow to
southern Iowa, a part of the state that has struggled economically through the
years. He said the industrial restructurings "are going to create hardships on too
many families in too many Iowa communities."
Register Staff Writer Tony Leys contributed to this article.