Graham closing Vandalia, Ill., plant

By: Michael Lauzon

May 2, 2012

YORK, PA. (May 2, 4 p.m. ET) — Blow molder Graham Packaging Co. has announced the closure of a third plant in the past few months.

The York, Pa., firm is closing its Vandalia, Ill., plant in the third quarter of 2012, the firm told employees May 1.

Vandalia Mayor Rick Gottman said he was surprised by the announcement.

“We just found out about it through employees [May 1],” Gottman said in a telephone interview.

The city has tried for a few years to make Vandalia a viable site for the giant blow molder.

“We tried to bring in a filling plant here a year and a half ago but Graham declined,” Gottman explained. Graham has numerous blow molding operations in customer plants where bottles are filled soon after they are molded under the same roof.

Graham in March announced plant closures in Delta, Ohio, and West Chicago, Ill. The company is North America’s second-largest blow molder, with 2010 blow molding sales of $2.2 billion and total sales of $2.5 billion. In June 2011 it was bought by Reynolds Group Holdings Ltd. for $4.5 billion.

Plastics News’ requests for an interview were referred to Graham’s human resources department in Lake Forest, Ill., which did not return telephone calls.

Gottman said the closure is a big blow to Vandalia, which has an unemployment rate of nearly 10 percent. Graham had employed 215 in the operation but had already laid off 77. Vandalia has about 7,000 residents. Several years ago a previous owner of the Vandalia operation employed as many as 800.

“We have a good plastics workforce,” Gottman said. The city will try to find a buyer for Graham’s facility. Selling points for the 170,000-square-foot manufacturing area and 200,000-square-foot warehouse include rail access, more than 15 truck bays and proximity to Interstate 70, according to Gottman.

Graham stated in a WARN notice in March that it would close its West Chicago operation by the end of the year. Layoffs will begin in July, leading to a loss of 81 jobs. In a separate WARN notice in Ohio it said it will close the Delta plant, a 65-employee operation, by the end of September.

“The decision to close the Vandalia plant is not a reflection of the workforce, but rather a result of the overall company strategy of plant rationalization and optimization of its network,” Graham said in a statement, according to the Herald & Review newspaper.

Graham runs more than 70 plants in North America. It partakes in a range of markets, including food and beverage, chemical, medical, toys, and lawn and garden. In 2010 it employed 6,700. It blow molds polyolefins, PVC and PET.