Berry Plastics Corp. has decided to close the Corry, Pa., plant formerly run by Erie County Plastics Corp., aka Erie Plastics Corp.
Berry plans to close the Corry operation in 60-90 days, said Robert Weilminster, Berry's vice president of corporate development.
Weilminster said in a Nov. 20 telephone interview that the Erie facility continues to lose money. Production will be moved to other Berry facilities.
Berry acquired the 495,000-square-foot plant and most of the machinery and equipment for about $6.9 million, including $6.7 million paid to Erie creditor J.P. Morgan Chase. J.P. Morgan retained accounts receivable. The deal was scheduled to close the week of Nov. 17.
``What it would take to get on track, we felt we can't achieve in a reasonable time,'' Weilminster said.
He cited the loss of a major contract for Procter & Gamble Co. early this year as a significant source of Erie's woes.
``Erie presents challenges to Berry,'' he said.
Former Erie employees are applying for their jobs through Adecco Group employment agency, a subsidiary of Adecco SA of Zurich, Switzerland. Union official Suzanne Chase said employees will get the same rate of pay as before the acquisition, but Berry might need to top up what Adecco will pay to maintain wage rates.
Union members had ratified a lower-wage package in September in a bid to keep their jobs. Adecco is handling employment issues at the Corry plant. About 200 workers are employed there, Chase said.
Weilminster said most Erie customers are already served by Berry, but Erie does bring a few new ones to the table. Berry will look at Erie's customers and decide how to best handle the business when it relocates work and machinery into as-yet undetermined Berry plants.
It is too early to tell if Berry plans to close any of its other facilities, according to Weilminster. The firm made several acquisitions last year and it is still digesting them.
``We're always evaluating [our facilities],'' Weilminster said. The Evansville, Ind.-based company last March merged with Covalence Specialty Materials Holding Corp., then in April acquired Rollpak Corp., and in December purchased Captive Plastics Inc. and Mac Closures Inc.
Erie filed for Chapter 11 protection in U.S. Bankruptcy Court in Erie, Pa., in late September, soon after confirming it was up for sale. The bankruptcy court approved Berry's purchase of the assets. Crawford Group of Cleveland was an early bidder for Erie.
Erie does more custom molding than Berry on a percentage- of-sales basis, Weilminster said. It makes a range of rigid, thin-wall packaging via high-cavitation and high-speed molding methods for various industries.
Berry is a broad-based packaging company supplying some 17,000 customers. Its lineup includes open- and closed-top packaging, polyethylene films, industrial tapes, medical specialties, heat-shrinkable coatings and specialty laminates.
The company has 68 plants globally and 14,000 employees. It had estimated injection molding sales of $1.3 billion in 2007 and runs 16 injection molding plants in the United States.
Erie was founded in 1960 as a two-press operation. It moved into its current, expanded facility in 2001. Last year it had sales of $83 million and ran 67 injection presses.
In 2002, Erie opened a plant in Szekesfehervar, Hungary, that is not included in the Berry transaction.
Weilminster said negotiations continue with Hoop Roche, Erie's former chairman and majority owner, to determine what role he might have in Berry. Roche was unavailable to comment on the purchase or his employment prospects.
