Pretium Packaging LLC is set to close a manufacturing site in Ypsilanti, Mich., that was part of recent larger acquisition, a move that will cost 53 people their jobs.
But a surge of orders that came in after the company recently told customers about plans to shut the facility down means production continues for now, Tim Wehrfritz, a consultant to Pretium and former senior vice president of the firm, said April 6.
While an exact date of closure has yet to be determined, he expects work to continue for another three months or so.
Pretium acquired the location in September as part of a larger deal for Alpha Consolidated Holdings Inc. and its 10 manufacturing sites.
Wehrfritz described the Ypsilanti plant as a smaller location with an inability to expand that is located near much larger company plants in Chicago, St. Louis and Cleveland.
"You can see the duplication. You can see where especially small sites that cannot improve their volume, they are landlocked. … It's just harder to recoup the escalating overhead costs of a facility. That was the situation here in Ypsilanti," he said.
Pretium will move machinery to other company locations, but plans are still being finalized. Wehrfritz described business in Ypsilanti as a "very broad number of low volume SKUs."
The company is working with customers that made advanced orders to ensure there will be enough inventory to meet their needs when machinery is relocated.
"We're in the process of determining our inventory. We're in the process of scheduling machine moves, putting all that together," he said.
Pretium previously sent a letter to the Michigan Department of Labor and Economic Opportunity indicating an earlier time frame for layoffs. But that changed when customers made the additional orders.
"We allowed our customers to advance buy, so to speak. Some of them came forward with some pretty high levels of demand. We're probably going to run through, I would say, maybe Fourth of July," Wehrfritz said.
A list of employees by job title was provided to the state as part of the company's notification. The eliminated positions include 23 inspector packers, five machine operators, six maintenance technicians, three process technicians, three production supervisors and six inspectors. Other singular jobs lost include a human resource generalist, maintenance manager, maintenance utility worker, mold room technician, production manager, quality supervisor and warehouse supervisor, the letter states.
"There is no union at this facility, and there are no bumping rights implicated. Affected employees have been or will be given separate notice of their layoffs," the letter states.
Pretium made a splash in September through the purchase of Alpha, which increased its number of locations from 19 to 29 at the time, including two in Europe that came as part of the acquisition.
At the time of the deal, Plastics News estimated the combination would push Pretium into the Top 10 blow molders in North America with estimated sales in that segment of the business at $700 million, according to the publication's annual ranking. Separately, Pretium previously ranked 14th and Alpha was 18th.
Alpha's products include PET and high density polyethylene packers, bottles and jars for the health and wellness and personal care segments.
Employees will receive severance packages when they ultimately lose their jobs.
"They are a great bunch of people. Many of them are long-service people," Wehrfritz said.
"Pretium takes this very, very seriously. It was not a quick decision that was made. But we also believe that while difficult, there is a right way to do it. That right way is to make sure you take into account the respect and the dignity of those employees. They earned that," he said.