Rubbermaid to Close Major NE Ohio Facilities

Here is a recently announced plant closing situation to learn from.

Newell Rubbermaid Inc. announced today it will close its Wooster Rubbermaid factory and headquarters, affecting about 850 employees, as part of the struggling company's restructuring efforts.

Joseph Galli, Newell Rubbermaid's chief executive officer, said the Wooster factory is a "very high-cost facility." The company will place at least some of the headquarter's staff at other Rubbermaid facilities, he said.

The company also has started talks with unionized factory workers over the closing. Galli called the closing "tentative," but analysts expect the plant will be closed.

Newell Rubbermaid is eliminating between $200 million to $300 million in annual sales of low-margin products, Galli said, and now can speed up the timetable for closing down product lines. The company intends to shift some production to lower-cost facilities outside the United States, Galli said.

This closing is no great surprise to me. When the company ws acquired by Newell, it was evident that the Rubbermaid part of the business would be subjected to intense cost reduction pressures. Newell has a reputation as being a fierce cost-fighter and as such as stripped many of its divisions of facilities that do not meet the company's financial bottomline. Competition from offshore producers has grown in recent years, forcing Rubbermaid to rely more on its foreign production sources.

What action steps should be taken to address this situation? Here are seven recommended steps:

1. An EDO SWAT team should be assigned to the project to gather more information on the situation and how it unfolds. This team should include Wooster, Wayne County, Akron Chamber, Team NEO and State of Ohio officials.

2. All options to prevent the closing or at least reduce the size of the local economic loss should be explored with the company. These should include continuing operations at the existing location and exploring new locations within the NEO region that may be more competitive than the existing plant location.

3. The ED team should make a proposal to the corporate owners to keep the plant open, reduce operating costs and produce new products in the Wooster facility. While this may be a long shot, the effort should still be made.

4. The ED team should identify possible companies to acquire the Wooster business and its facilities. Again, this may be a long shot, but this stone must be overturned.

5. A worker adjustment plan should be developed to assess impacted worker skills, retraining needs and possible new job placements within the region.

6. Learn as much as possible about the factors driving the company's decision. Which, if any, of these factors could have been addressed by local/state ED officials.

7. Assess whether any other NEO Rubbermaid facilities are vulnerable at this time. What can be done to reduce these vulnerabilities?

Rubbermaid operates a large network of production facilities globally. Here is the list:

AZ--Phoenix
Mexico--Cadereyta
TN--Cleveland
Mexico--Monterrey
VA--Winchester
AZ--Phoenix
France--Amiens
France--Grossiat
France--Lomme
Germany--Dreieich
Hungary--Debrecen
IA--Centerville
Mexico--Cartagena
Mexico--Tultitlan
NC--Greenville Netherlands Brunssum
OH--Mogadore
OH--Wooster (To be closed)
Canada--Mississauga
Poland--Seupsk
Spain--Zaragoza
TX--Cleburne (Closed)
TX--Greenville
TX--Wills Point
UK--Corby
Nether.--Goirle
KS--Winfield
MO--Farmington
Canada--Paris
CA--San Bernadino
OH--Canton
OH--Macedonia
PA--Elverson
IL--Elk Grove
P. Rico

Read more here.