Silgan Plastics Corp.'s plans for its blow molding plants in Port Clinton and Ottawa, Ohio, offer a snapshot of the intense competition between communities to retain and expand manufacturing jobs in a tight U.S. economy.
Chesterfield, Mo.-based Silgan announced Feb. 2 that it would close the Port Clinton facility in the third quarter of 2010. According to Port Clinton officials, the firm moved machinery from Port Clinton to Ottawa and then moved it back to Port Clinton.
They couldn't produce the quality [of] bottle for the customer that they were planning, so they moved that [equipment] back to Port Clinton, and we're continuing to produce the bottle, said Port Clinton City Council President Linda Hartlaub. She did not know who the customer was.
No one has been laid off at the Port Clinton plant, though a few employees have found other jobs since the closing was announced, Hartlaub said in an Aug. 11 phone interview.
Officials at Silgan were not available for comment.
Now Port Clinton is protesting the use of state funds to help Silgan move work to Ottawa.
According to a July 19 news release from the state Department of Development, Silgan will invest $13.2 million to renovate and convert part of its 270,000-square-foot Ottawa site from a distribution to a manufacturing center; construct a new distribution facility and rail spur; and make infrastructure improvements.
Silgan was granted a state tax credit of $180,536 over six years to add 30 jobs and retain 146 positions at the Ottawa plant. The firm also will receive a $75,000 state Rapid Outreach Grant for the expansion project.
Hartlaub is writing a letter to the Ohio Department of Development protesting the use of community development block grant funds for the project.
Our concern is that there's state money being used to help [Silgan] and the village of Ottawa produce 30 jobs while we're laying off 154 people here. The state then ends up with a net loss of 124 jobs. It doesn't seem to be a practical use of state money, she said.
Jeff Loehrke, Ottawa's economic development director, said in an Aug. 11 telephone interview that the village is seeking $195,000 in block grants out of $390,000 necessary for water and sewer improvements to support Silgan's expansion. Silgan had earlier expressed interest in moving Ohio production to its plant in Ligonier, Ind., he said.
I understand why Port Clinton is upset. Believe me, I do, Loehrke said. But it's [move from Port Clinton to Ottawa] or else those jobs leave [Ohio].
He said plans call for Silgan to create 30 new jobs in Ottawa and potentially to transfer 67 employees from the Port Clinton plant. Loehrke was unaware of any movement of equipment back and forth between Ottawa and Port Clinton.
Katie Sabatino, a spokeswoman for the Ohio Department of Development, confirmed Aug. 11 that Silgan had received a state grant and assurances of tax breaks for its Ottawa project. We are aware that we may receive a request for community development block grant funds [from the village], but we have not received that yet, she said by phone. Sabatino said she had no further information on Silgan's plans in Port Clinton.
Silgan Plastics ranked No. 8 in Plastics News' most recent survey of North American blow molders, with related sales of $651.9 million. The business is a unit of publicly held Silgan Holdings, a packaging company with 2009 sales totaling $3.1 billion and 66 manufacturing sites worldwide.