Business

New owners hope to keep plant open

A company that announced plans to close a newly acquired facility in Danville hopes to find a way to keep it open, a company official said Tuesday.

Intelligrated bought FKI Logistex and its conveyor manufacturing plant in Danville in June, then in November announced it would move jobs from the facility to Intelligrated factories near Cincinnati and Columbus, Ohio.

With the purchase of FKI Logistex, Intelligrated had three plants making essentially the same product but not enough business to support all three, said Mark Tefend, vice president and general counsel.

He said the Cincinnati company is "exploring other relationships with players within the industry and outside the industry that have an interest that are aligned with our interests to keep jobs in Kentucky.

"We are in discussions with the state of Kentucky to bring new work into Danville so that we don't have to execute our plans to lay off folks or at least slow down the laying off of very good workers," Tefend said.

The Danville plant employs more than 200 people, including 180 production workers and about 50 office workers.

Tefend said he couldn't be more specific about what might happen to the plant.

"If these plans don't pan out, we will go through the process of substantially closing that operation," Tefend said.

"It kills us to have to make a decision to close any plant, especially one that has some very good workers," he added. "We are trying to be as creative as we can to bring in new work outside of our core. It's a good workforce."

The Danville plant was opened by Rexnord Corp. in 1973 and has had several owners over the years. FKI Logistex was created in 2001 when Buschman Co. and Mathews Conveyor combined operations.

Conveyors made at the plant are used in warehouse and distribution centers for companies such as Wal-Mart, Big Lots, Staples, Home Depot, Lowe's, UPS and others.

Jody Lassiter, president and CEO of the Danville-Boyle County Economic Development Partnership, said the organization will work with Intelligrated "to preserve as many of those jobs as possible."

Danville has taken some lumps during the recession. In mid-November, Red Wing Shoe Co. announced it would close a plant that employs 206 people as part of a restructuring. Kmart also announced in November that it plans to close its store in the city, with 64 employees, in March. Before it was purchased by Intelligrated in June, FKI Logistex had begun to move some work from its union plant in West Chester, Ohio, to the non-union Danville plant.

But the West Chester plant is about 10 miles from Intelligrated's headquarters.

"We benefit from having that location close to us," Tefend said.

In another blow for Danville, Intelligrated uses a different software package for integrating all the company's accounting processes from what FKI Logistex used, a system which "was antiquated and unsupportable."

Kentucky and Ohio officials sought to keep Intelligrated jobs. In November, Intelligrated announced it had accepted a $24 million incentive package from Ohio to keep jobs there. The package included a forgivable $6 million logistics-and-distribution stimulus loan that would accelerate the implementation of an Oracle software system.

"At the conclusion of certain defined tasks they forgive the loan that was used to finance those tasks," Tefend said. "With $6 million, I can implement Oracle immediately, which will then enable us to produce in a very systematic and efficient way our conveyor products in West Chester."

Because of that, production that had been moved from West Chester to Danville will return to West Chester as well as to the London, Ohio, plant near Columbus. That transition will take place during the next eight or nine months so it does not jeopardize any obligations to customers, Tefend said.

Tefend said about 100 production jobs will be created in West Chester and London as a result of the transition. In all, Intelligrated hopes to create 267 jobs during the next three years in Ohio and retain 537 others.

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