Fortis Plastics has laid off about 70 employees at its Fort Smith plant within the past six months, according to a source with direct knowledge of the plant’s activities.
The plant, previously operating as Atlantis Plastics, is located at 428 S. U St., and employed about 300 full- and part-time workers prior to Thanksgiving. About 40 temp workers were cut in November and 30 full-time workers were given layoff notices after the holiday break. About 230 are now employed at Fortis’ Fort Smith plant.
Production at Fortis’ Fort Smith plant is “primarily driven by Whirlpool,” according to the source.
“The domino effect of what Whirlpool is doing is devastating this city,” said the source, citing several recent job loss announcements among Whirlpool suppliers.
UPDATE INFO — Fortis offered this response to The City Wire: "Fortis Plastics, LLC continues to have active dialogues with agricultural, aerospace and automotive customers to help replace the previous Whirlpool business. However, given the current state of the economy and its effects on the plastics industry, the Company has decreased the workforce at its Fort Smith, Arkansas facility.”
THE WHIRLPOOL EFFECT
Benton Harbor, Mich.-based Whirlpool Corp. operates a large refrigerator and trash compactor manufacturing plant in Fort Smith. However, the company in the past few years has moved much of its production to a plant in Ramos Arizpe, Mexico. As a result, Whirlpool has reduced employment at its Fort Smith plant from about 4,500 in early 2006 to between 1,500-1,000 today.
In mid-November, Jarden Plastics Solutions announced the closure of its Fort Smith plant, eliminating 93 jobs. The Greenville, S.C.-based company cited “declining demand” from its largest customer — Whirlpool Corp. — as a reason for the closing. The plant opened in Fort Smith in 1976.
Riverbend Industries, a supplier to Whirlpool, has seen its temporary employment count drop from 120 to about 60 at its Fort Smith plant on Wheeler Road. The company employed about 120 full-time workers in November 2008.
John Laine, president of Evansville, Ind.-based TGI, has said the future of the 30 employees at the company’s Van Buren plant is uncertain. Tech Group’s Van Buren plant — located at 1819 S. 28th St., in the Van Buren Industrial Park — produces components for Whirlpool Corp.’s Fort Smith refrigerator plant. At the beginning of 2008, Tech Group employed 60 in Fort Smith, but Laine said employment is down to about 30.
Laine said Whirlpool’s production has “drastically dropped over the last year” from around 5,000 units a day to about 1,700 units a day.
FUTURE OF FORTIS IN FORT SMITH
Because equipment from former AtlantIs Plastics plants has been moved to Fort Smith, the source detailing the lay offs did express confidence that the Fortis plant in Fort Smith would remain open.
“We’ll probably have some more layoffs, but yes, I’m pretty confident that they (Fortis) will keep this plant going,” the source noted. “Geographically, we’re in a good location so that shipping and other things are easier out of here than at the other places.”
Indeed, Fortis has made it clear it is considering new options for plant locations and a corporate headquarters.
Kentucky has offered $4 million in tax incentives to convince Fortis to locate its headquarters in Henderson and keep existing manufacturing jobs at its plant, according to a Dec. 17 report in the Manufacturing & Technology eJournal.
The move, according to M&T, could add more than 100 jobs. The report also suggested Fortis is looking at other options, including closing its Henderson plant and moving operations to Tennessee and Arkansas (Fort Smith).
“If the company decides to consolidate operations in Henderson, it will need to spend more than $6.5 million on equipment as well more than $300,000 on renovations. Fortis currently employs 150 at Henderson, where it operates round-the-clock with an annual payroll of about $5.7 million,” noted the M&T report.
Erica Bartsch, a spokeswoman representing Fortis, told The City Wire the company is still reviewing options.
Sandy Sanders, interim president of the Fort Smith Regional Chamber of Commerce, said Tuesday he was not aware of the Fortis search for a new headquarters, but will attempt to make contact with Fortis officials.
"If they (Fortis) think a headquarters location is still in the game, then yes, I think we would want to pursue that to the extent it is possible," Sanders said.
Fortis, a diversified custom molding business, serves the appliance, furniture, building products and medical device industries. Monomoy Capital Partners spent more than $23 million to acquire the molded products group of Atlantis in October 2008. A month earlier, it bought L&P Plastics for an undisclosed sum, and Monomoy then merged L&P and Atlantis.
Fortis operates plants in Elkhart, Ind.; Fort Smith, Ark.; Henderson, Ky.; Jackson, Tenn.; Carlyle, Ill.; Popular Bluff, Mo.; Booneville, Miss.; and Brownsville, Texas.
Monomoy Capital Partners is a $280 million private equity fund that makes controlling investments in middle market companies, according to its literature. The Fund has completed 18 transactions in the smaller end of the middle market over the past 30 months and owns 12 businesses that employ more than 8,000 people.