Global Fastener News

Textron Fastening Systems to Close New Fastener Plant in Mississippi

Jason Sandefur

Hit hard by a declining domestic car industry, Textron Fastening Systems will close its new fastener plant in Greenville, MS, in early 2006, shuttering a $35 million facility that opened in January 2004 with hopes of eventually employing a workforce of 500.
TFS communications director Tim Weir said the Big Three’s struggles have hurt auto suppliers such as Textron and Delphi Corp., which recently filed for Chapter 11 bankruptcy. He also cited the Greenville plant’s “high start-up costs.”
“Ultimately, the steps we took to improve the plant”s performance were insufficient to offset continued declining volumes and lost business from its automotive customers,” TFS said in a written statement. “For many months, we have operated the plant with far less business than was originally intended, within a cost structure that was designed to support far more. We could no longer continue to absorb the impact created by this situation.
“Certainly our company had hoped for a different outcome in Greenville.”
The plant’s 120 employees were told of the closing on October 17 by plant manager Carlos Lloyd. The Greenville factory was intended to consolidate much of the company’s fastener production from other U.S. locations, including plants in Rockford, IL. TFS went through several rounds of layoffs while trying to bolster operations at the facility, which manufactured specialty threaded fasteners and engineered assemblies for the auto industry.
“We moved too fast to get the plant up to speed and to expect employees to get to a skill level before it was really feasible to do that. That was what led to the reduction,” Weir told the Associated Press. “For many months, we have operated the plant with far less business than was originally intended, within a cost structure that was designed to support far more. We could no longer continue to absorb the impact created by this situation.”
However, TFS will not shift current Greenville production back to Rockford. “No work will return to Rockford,” Weir told FIN. “We are actively pursuing the sale of our Rockford Operations Samuelson Road facility to potential qualified buyers. While the discussions remain active, a definitive sale agreement has not yet been reached.”
A potential sale in May fell through, according to the Rockford Register Star. TFS employs 700 people at four locations in the Rockford area. The company owns the Samuelson Road plant and one on Falcon Road in Rockford, and one in Belvidere. It has administrative offices in Rockford.
Weir told FIN that TFS plans to stop producing the product lines currently made in Greenville. “In the weeks ahead, we will work closely with our customers to move the production of these parts to other qualified fastener suppliers,” Weir explained. “We want to move this process forward as quickly and efficiently as possible. Our goal is to phase out production at Greenville altogether during the first quarter of 2006.”
TFS intends to build up inventory to get customers through the next several months.
TFS tried to sell the Greenville operations, but potential buyers faced the same economic challenges and balked, Weir reported. Washington County, MS, officials spent $1.2 million to purchase and improve the site, while other economic grants topped $2 million. Weir said TFS would repay these incentives and the remaining payments on the lease.
News of the Greenville plant closing follows an announcement by parent company Textron that it is “evaluat(ing) a a range of strategic alternatives that may include a sale of all or a significant portion of [TFS].” The company took a $341 million impairment charge after the announcement.
Pressure to cut costs contributed to the Greenville plant’s demise, Weir told FIN.
“When Textron announced it would review strategic alternatives for Textron Fastening Systems last month, we told our employees that we would continue to take actions that were necessary to improve our performance. Closing the Greenville plant is one of those actions.” Web: textronfasteningsystems.com �2005 FastenerNews.com