Thompson Pipe Group will close its Zachary manufacturing plant later this year, a move that will impact 120 workers as the region faces its third announced plant closure in a week.
The firm’s decision comes after Georgia-Pacific said earlier this month it would close down a major division of its Port Hudson paper mill, laying off 650 at the site. And almost in January, German chemical giant BASF confirmed it is shutting down its specialty chemical plant that employs 54 in the spring.
All three closures will take place later this year.
“Any time when you have plants or people losing jobs it’s always unfortunate,” said Zachary Schools Superintendent Scott Devillier. “It sure seems like it’s hitting us all at once.”
Devillier said the school system is focusing on helping families and students cope with the recent layoffs and said it will likely host a job fair in the coming weeks.
While the closures are not expected to immediately impact the Zachary school system’s budget, they could lead to a budget crunch down the road after the facilities are decommissioned. Devillier said it is still too early to say what the financial impact will be.
Detlev Schlorke, Thompson Pipe Group's vice president, said the firm is consolidating the plant, at 18585 Samuels Road, into its Alvarado, Texas, operations. He said the company is offering employees jobs in Texas, but it’s not clear how many will find employment there. Some employees have already moved to Texas, he said.
About 30 workers will be seeking employment following the Thompson Pipe closure, Mayor-President Sharon Weston Broome said.
The Louisiana Workforce Commission said it has not yet received a WARN notice, which is required for many plant closings and mass layoffs.
“We’re relocating it because we have a huge facility in Alvarado,” Schlorke said. “It doesn’t make sense to have this plant sitting here as opposed to consolidating resources in Alvarado.”
“This is just a strategic plan we’ve had in place for many years,” he added.
The plant likely will shut down in late summer, Schlorke said. It will stay in operation through mid-year, then be decommissioned likely by July or August, he said.
The Rialto, California-based company acquired the Zachary pipe manufacturing facility in 2008 from Amitech USA for $14 million. The firm manufactures fiberglass piping systems for a range of uses, including sewer systems, potable water and wastewater treatment plants in North America.
The Georgia-Pacific layoffs, which are expected to take place in March, will ripple through the regional economy and could lead to 2,150 other lost jobs across the state, according to an LSU study.
The BASF closure will affect 54 workers. The firm said it is trying to place employees at its facilities in Geismar.
“The announced operational shutdowns in East Baton Rouge Parish are unfortunate, and we are working with our partners at the Louisiana Workforce Commission and the City-Parish to provide new job opportunities for the employees affected at Georgia-Pacific, BASF and Thompson Pipe Group — as are the companies themselves, judging by their own public statements regarding subsequent job relocation offers," said Louisiana Economic Development Secretary Don Pierson.
He said in each case, the companies appeared to face changing market conditions and their actions aren't reflective of the state's economy, business environment or workforce. The state and local economies are strong, stable and growing, he said. Pierson noted that since Thanksgiving, the department has announced seven economic development projects, representing over $2.2 billion in new capital investment and 1,139 new jobs for the state.
Thompson Pipe Group did not appear to have any active tax incentives, according to Louisiana Economic Development records, unlike the Georgia-Pacific mill, which had only recently won approval from locals a $2 million property tax break. The Industrial Tax Exemption award will not move forward following the layoffs, the company has said.
The LSU study, conducted by Shaun Tanger, a forest economist at the LSU AgCenter, found the Georgia-Pacific layoffs at its business paper operations will result in the loss of nearly $188 million in labor income and $22.8 million in tax revenue for state and local governments as it ripples through the economy. About 300 people will remain at the Georgia-Pacific mill making paper towels and toilet paper.
At his inauguration Monday night, Zachary Mayor David Amrhein said the layoffs won’t “stand in the way of our progress.”
“Zachary’s time-tested and proven resiliency model will continue to make our city even stronger,” he said. Zachary’s population at last count was 17,538 and it had a median income of $79,346, well above the U.S. figure of $57,000, census data show.
East Baton Rouge Metro Councilman Trae Welch, who represents Zachary, said the closures underscore the need to be “friendly with the plants.” Welch brought the Georgia-Pacific tax break to the council before deleting it in December, effectively approving it.
“The truth is the bread and butter in this community is to make sure our large employers are able to continue to employ our people,” he said.
"The timing and proximity of these closures is disheartening news for our residents who’ve been impacted, but we realize that cutbacks and closures are part of a changing economy and supply and demand," Broome said. "Our collective goal continues to be to help everyone find new jobs and careers here in the Baton Rouge area. Our efforts to support Georgia-Pacific employees are well underway, and it is our intention to consolidate our resources to assist all citizens in need of employment due to recently announced layoffs."