Pittsburgh Tube Intends to Consolidate Production By Closing Aging Monaca Facility
6 May 1998
Pittsburgh Tube Intends to Consolidate Production By Closing Aging Monaca Facility
PITTSBURGH, May 6 -- Pittsburgh Tube Company announced today
that it has tentatively decided to close its 75-year-old manufacturing plant
in Monaca, Pa., effective July 31, 1998, because of its need to shift
production to more competitive and efficient facilities. The company is in
the process of formally notifying Monaca employees.
The decision is a step in Pittsburgh Tube's long-term need to build a
stronger future by focusing on providing world-class products and unparalleled
service for its customers, according to Richard Huemme, chairman, president
and chief executive officer of Pittsburgh Tube. Over the past eight years,
Huemme noted, the Monaca plant had a net loss of $11 million. Had the plant
been as efficient as other Pittsburgh Tube plants, it would have made a profit
of $10 million in the eight-year period, rather than a loss.
"After months of carefully reviewing our options for Monaca, the company
has decided that the demand for competitive production capabilities makes it
necessary for us to move production to plants that are better equipped to meet
the needs of our customers," Huemme stated. "Unfortunately, the Monaca plant
is an antiquated facility that cannot accommodate the production systems and
equipment we need to be competitive.
"This is a difficult decision to make because it will have an impact on
our dedicated employees at Monaca and their families," Huemme said. "We will
do everything we can to help make this transition as smooth as possible for
our employees if, as expected, the closing occurs."
Huemme emphasized that the company would offer a comprehensive package of
severance pay, benefits and job search services to the Monaca plant's 70
employees if the plant is closed. Half of the plant's hourly employees are
eligible for retirement benefits. The company has notified the United
Steelworkers of America (USWA), which represents the 59 hourly workers
currently at Monaca. "We also intend to work with economic development leaders
to promote jobs for our displaced workers with several firms that have
recently announced plans to open facilities in the Beaver County area," Huemme
said.
If, as anticipated, the Monaca plant is phased out, the company intends to
shift production to its facilities in West Virginia, New York, Illinois and
Kentucky. Those plants are in a much stronger position to meet the needs of
customers in the company's fastest-growing markets, Huemme noted. The company
intends to move salvageable production equipment to its other facilities.
"Working closely with our employees, we tried for the past decade to
improve production and overcome inherent structural limitations of the Monaca
plant and property that made it much less competitive than our other
manufacturing operations," Huemme said. "Our efforts included making
significant capital investments in an attempt to upgrade the plant.
Unfortunately, the results were not sufficient to justify further investments
in this outdated facility."
Huemme added that Pittsburgh Tube hopes to meet with state and local
officials to help identify possible alternative uses for the Monaca plant
property.
Pittsburgh Tube would still maintain a strong presence in western
Pennsylvania. The company has 30 employees at its headquarters in Moon
Township. It has 90 employees at its Darlington plant; most are hourly
workers represented by the USWA. The Darlington facility was constructed in
1981 and upgraded and expanded in 1990.
"Our Darlington plant remains an important part of our strategic plan for
market expansion and growth," Huemme concluded. "I'm confident that our
Darlington employees will continue their efforts toward the success of our
company."
Pittsburgh Tube is a leading producer of welded and cold-drawn steel
tubing and tubular shapes, electrical conduits, fabricated parts and precision
components. Its major markets include the automotive and truck industries,
construction and agricultural equipment, machinery, appliances, and steel
service centers. The Monaca plant manufactures custom, cold-drawn steel tubing
that is typically sold to steel service centers and suppliers of automobile
and transportation components.
The company has 10 manufacturing facilities in Illinois, Indiana,
Pennsylvania, New York, West Virginia, Kentucky and Germany. Pittsburgh Tube
has 1,600 employees overall.
SOURCE Pittsburgh Tube Company
