Company to move
much of its appliance
motor production overseas.
By Gary Perilloux
A long-rumored plant closing came to fruition Monday as Emerson Motors announced it will close its 500-employee Oxford facility, the largest manufacturing employer in Lafayette County.
The closing will come by the end of 2002, with the first workers to be laid off in 60 days.
In a statement, the company said its appliance motor business has been "under intense pressure from international competition, as well as the current prolonged economic downturn."
The Oxford facility opened in 1970 and makes motors for dishwashers and clothes dryers.
"The prolonged downturn in the economy is part of it," Emerson spokesman Matt Wisla said. "But primarily it is based on the dishwasher motor business (which) has just been facing intense competition lately from companies that build motors where the costs of doing business are lower than they are here, based on a variety of factors - utility rates, labor, materials and other things."
Makers of goods such as appliances and furniture have seen demand drop during a recession that officially began in March, with consumers buying fewer new goods than in robust economic times.
That trend has forced manufacturers to tighten their ships. In the last several years, Mississippi has seen its manufacturing work force shed 30,000 jobs from an all-time high of 243,000.
For its 2001 fiscal year ended Sept. 30, Emerson sales fell $65 million to $15.48 billion. Earnings dropped 9 percent from $1.42 billion in 2000 to $1.29 billion this year.
Emerson also operates a motor facility in Philadelphia, Miss., but that site makes large electrical motors for industrial and commercial applications, which represent an entirely different product line, Wisla said.
The closing will be a jolt to Oxford and Lafayette County, which traditionally boast the lowest unemployment rate in the state. That rate stands at 1.9 percent, with the next lowest being Rankin County at 2.5 percent.
The only employers in Lafayette County larger than Emerson are the University of Mississippi (2,500 jobs), Baptist Memorial Hospital-North Mississippi (1,000 jobs) and the North Mississippi Regional Center (800 jobs).
Max Hipp, executive director of the Oxford-Lafayette County Economic Development Foundation, said discussions with Emerson officials revealed little hope of keeping the company in Lafayette County.
"It was pretty much a foregone conclusion that (production) would be split up with Mexico and China," Hipp said. "But it will probably take a year to close it down. There's some ramp-up that would occur in these other places and they're going to need to gear up to do more business."
Wisla said some of the production would move to other U.S. plants as well as Mexico and China. In all, the Emerson Motor Technologies division includes 26 manufacturing facilities in nine nations and is the world's largest maker of motors at more than 330,000 a day. They wind up in a variety of brands, including Maytag and Whirlpool. About four out of every five white goods appliances in North America are powered by Emerson motors.
Hipp said plans are in motion to market the 190,000-square-foot, company-owned manufacturing site on old Highway 7 North near the entrance of the Lafayette County Industrial Park.
"I'm guardedly optimistic," he said of finding a new tenant. "But in this day and time, you can't count on anything. I'm sure there are lots of plants like that available, so I'm just hoping (Emerson) may have somebody that has an interest in it. Or we may be able to do something with their corporate people to market it. It may be the use of the facility will be completely different."
Hipp has contacted the Rapid Response team of the Mississippi Development Authority for help in gaining new jobs and training for the 500 employees at the plant. A silver lining is that some time is available before the employees begin facing layoffs in two months.
Employees were advised of the closing in different shifts Monday. Prior to the closing announcement, the largest job reduction in 2001 was a 30-worker layoff in April.
"That plant has been a real good corporate citizen of Lafayette County," Hipp said. "They provided a real stable employment base for a lot of families, and our thoughts are with the people and their families that will be so directly impacted by this.
"The only fortunate thing, I guess, is the first layoff is not until March. So it's not like they closed the plant today and people are out on the streets. There will be a little time for us to mobilize this Rapid Response effort."