Compounding leader PolyOne Corp. is trying to make the best of a challenging situation. So is former PolyOne employee Sheldon Reynolds.
Adverse business conditions have led Cleveland-based PolyOne to announce the closings of 14 plants and the elimination of almost 600 jobs, all since June. Adding a combined plastics and rubber compounding site to the mix means 120 more job cuts.
Reynolds, the 41-year-old former manager of the plastics and rubber plant in Kingstree, S.C., now is looking for a job after a 14-year career. He is strongly considering leaving the Kingstree area, along with his wife and four young children, to find work elsewhere.
Closing plants and cutting jobs is the last step any manufacturer wants to take. PolyOne has tried to handle the closings through a series of moves, including:
* Hosting job fairs at sites that do not have strong economies. Fairs already have been held in Kingstree and Broadview Heights, Ohio, and are slated this year for Farmingdale and Somerset, N.J.; Valleyfield and St. Remi, Quebec; and Bethlehem, Pa. A second fair could be held in Kingstree in February.
* Chartering a bus so interested workers in Bethlehem could check out the plant in Avon Lake, Ohio, to see if they would want to transfer there. PolyOne arranged for Avon Lake-area real estate agents to talk with Bethlehem employees at that time. The group of 70, including employees and their spouses, also took a dinner cruise on Lake Erie and a trolley tour of Avon Lake and the surrounding area, all paid for by PolyOne.
* Providing bonuses of $2,500 to employers that hire former Kingstree workers. PolyOne also may extend the bonus to employers in other areas hosting job fairs.
* Offering resume services, job counseling and computer workshops to former Kingstree workers through an outplacement agency. PolyOne also has opened a 3,000-square-foot temporary office in Kingstree to house those efforts.
``We're dealing with something that has to be done economically, but the people [at the closing plants] kept their end of the bargain,'' Thomas Waltermire, PolyOne president and chief executive officer, said in a recent interview.
``We have to keep in mind that those who are continuing with the company know they can find themselves in the same situation where the dynamics of the marketplace change,'' he added. ``It's just as important for those who are staying to understand they're working for a company that will help them land on their feet if that ever happens to them.''
The outplacement efforts, including hiring bonuses, could end up costing PolyOne as much as $2.5 million, based on an average of $5,000 it spent for each employee in Kingstree. Waltermire said the expense is justified, even in a troubled business climate.
``We're not taking advantage of shareholders,'' Waltermire said of the outplacement cost. ``And it's good business for the long-term.''
Already, 30 former Kingstree workers have found jobs, according to Debbie Williams, owner of DK Williams & Associates, a Kingstree company that is working with Charleston, S.C.-based outplacement firm First Sun Outplacement and national outplacement firm Ratliffe, Taylor & Lekan to find jobs in the area.
That task can be especially daunting in Kingstree and surrounding Williamsburg County, which has the state's highest unemployment rate. It's a largely rural area, where manufacturing has moved from the textile industry to serving automotive firms.
After setting up a 125-mile radius, Williams helped round up 20 firms, including other manufacturers and a truck-driving school, for the August job fair. She credited PolyOne with taking an excellent approach to the closing.
``A lot of companies we work with say, `You handle it,' and we never hear from them again,'' she said. ``But PolyOne has stayed in touch with us and been very sensitive to the issue. No other firm has given their workers unlimited support for as long as they need it.''
Moving on
Reynolds is looking to move on. He started with Colonial Rubber Works as a management trainee in 1987, shortly before the company was bought by PolyOne predecessor M.A. Hanna Co.
He spent six years in field sales and did a three-year stint at a Hanna plant in Dyersburg, Tenn., before returning to Kingstree as plant manager in the mid-1990s.
Reynolds - who grew up in Bishopville, about an hour and a half's drive from Kingstree - has been working as a history and physical education teacher at a local high school, but wants to get back into manufacturing.
He said the writing had been on the wall for some time for the Kingstree plant, but that did not necessarily lessen the blow when the closing was announced in June.
``You always hope, even to the last minute, that things will change,'' Reynolds said in a recent phone interview. ``We had hoped to bring more volume in, but it didn't work out.''
There were a number of factors working against the Kingstree plant. Primarily, the plant did a large volume of its business with a small group of customers. At least half its clients were in the automotive market, which has struggled with its own profit issues. One of those customers told the plant in early 2000 that it would end its contract at the end of 2001, eliminating about 25 percent of the plant's total sales.
``Unfortunately, [losing that account] coincided with severe softness in the manufacturing area,'' Reynolds said.
The outplacement service already has helped Reynolds find a couple of job leads, but he turned down one job because of a lengthy commute, and another offer disappeared when the company could not fund the position.
``Odds are that we'll have to relocate,'' he said. ``Opportunities in this area aren't what you'd call robust.''
Reynolds' wife's work also is affecting his decision. She is with the state's mental health bureau and is 11 years from retirement. An out-of-state move would take that away, along with the retirement benefits the job would provide.
Reynolds also credited PolyOne with extending severance and benefits long enough for several Kingstree employees to reach retirement levels. Some Kingstree workers had been with Colonial since it opened in 1973.
``This experience has taught me that you need to do everything you can to be multitalented,'' he said. ``I look at every change and challenge as an opportunity. You can't look back in a negative light.''
Although PolyOne's offering of outplacement help and resume services are ``fairly typical,'' its bonus to employers and Bethlehem-to-Avon Lake bus charter is more unusual, according to Nick Fountas, managing director at JLI-Boston, a Boston-based executive search firm that serves the plastics industry.
JLI has worked with PolyOne in the past, but is not involved in PolyOne's outplacement efforts.
Chartering the bus was a particularly good idea, especially since the slowing economy probably will make workers ``more likely to pull up stakes'' than they were in the past, Fountas said. At PolyOne, nine former Kingstree workers have transferred to a PolyOne site in Seadrift, Texas, more than 1,000 miles away.
``I don't know how you can get a good idea [whether] you'd want to transfer without a plant visit,'' he said.
`Corporate citizen'
Not only is helping downsized workers a sign of being ``a good corporate citizen,'' Fountas said it can pay off down the road if PolyOne needs to rehire.
``Sometimes you need to pick up the same people, and people have a long memory about the way they were treated,'' Fountas said.
Unfortunately, the problem of how to deal with laid-off workers is likely to continue in the plastics industry as it consolidates sites, Fountas explained.
``Smaller companies will deal with [downsizing] differently than a company the size of PolyOne, but it comes down to, do you just burn everybody or do you take on the responsibility?'' he said.
``A lot of times in these situations, CEOs will go back [to] their personal ethics and values,'' Fountas added.
PolyOne has emphasized its commitment to the compounding market by announcing plans to invest $50 million in its 20 remaining sites in the next three years. The projects - including installing extrusion lines and providing upgrades in other areas - will create about 100 jobs.
``When we're done, two-thirds of our equipment will be brand- new or extensively modernized,'' Waltermire said. ``We're not walking away from business. Our customers are still there and we look to be with them long-term.''