A new union contract gives Kerr Group Inc. more flexibility at its Lancaster, Pa., plant, and the company now has investment plans that eventually should boost employment at the site.
The manufacturer of plastic packaging products employs about 50 there, down from 800 in the 1980s.
Members of United Steelworkers of America Local 1035 ratified a three-year contract May 23, retroactive to April 30. Changes include a new shift schedule that allows seven-day-a-week operations instead of five, and a reduction of more than 80 job classifications to three.
Hourly workers received a $600 signing bonus. The contract freezes wages for 12-18 months and then provides for hourly raises of $1-$1.50, bringing rates to $12.35-$14 per hour.
The flexible work rules will ``lead to some temporary reduction in the work force, but we see the bottle business building from there,'' Richard D. Hofmann, president and chief executive officer, said in a telephone interview.
Kerr intends to invest more than $1 million in blow molding equipment. The Lancaster plant has 16 blow molding machines for production of plastic bottles, mostly for pharmaceuticals.
``We've said the plant was losing money for a number of years, and we kept saying we want to make it good,'' Hofmann said. ``We needed willingness on the part of the people.''
The company plans heavy doses of training.
Kerr has relocated equipment within a 75,000-square-foot area of the old plant, which occupies 400,000 square feet. Much of the building is used for storage. Kerr is using new molds to add bottle sizes and more vision systems for quality inspection, Hofmann said.
Hofmann said Kerr recorded 1998 sales of $128 million, including a full year of revenue from its Sun Coast Industries Inc. unit, which was acquired in the first quarter of 1998. He predicts sales will exceed $140 million this year.
Private investment firm Fremont Partners LP of San Francisco acquired Kerr in August 1997 and is investing about $20 million per year to improve operations.
``We are very definitely on good financial footing [and] have significantly improved profitability of the business over the past two years,'' Hofmann said.
Kerr also operates plants in Bowling Green, Ky.; Ahoskie, N.C.; Jackson, Tenn.; and Sarasota, Fla. Kerr makes tamper-evident and child-resistant closures and plastic vials and bottles for pharmaceuticals, drugs, food and liquor.