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Trane, Pernod Ricard paint picture of manufacturing sector ups and down

story by Michael Tilley
mtilley@thecitywire.com

Recent news from Trane and the Pernod Ricard (formerly Hiram Walker) operations in Fort Smith exemplify a recovery struggle within a regional economy hit hard in the past decade by significant manufacturing job losses.

Trane, which operates a residential and light-commercial air conditioning equipment manufacturing plant in Fort Smith, has in recent months added jobs to a plant that once was feared to be near closure.

Beginning in late 2009 and early 2010, a Trane plant which once employed more than 500 began to lose production as the effects of the national housing downturn hit the air conditioning industry. More than 200 jobs were cut in 2010. In early 2012, the company announced that 59 more jobs would be lost with “transfer coil production” moved to Columbia, S.C.

By the summer of 2012, the company employed just under 200 hourly and around 25 salaried workers.

BETTER TIMES AT TRANE
But that picture is changing, according to Chris Farnsworth, Trane’s plant manager in Fort Smith. He’s been with the company more than 23 years, with seven of those in Fort Smith and 16 in a Trane plant in Tyler, Texas.

“We were at 135 (employees) in March (of 2013), and we’ll be up to 212 by the end of this month,” Farnsworth told The City Wire in a recent interview. “We’re in a growth mode. ... Things here are going in a much more positive direction.”

With around 25 salaried workers, Trane will employ about 100 more than it did this time in 2013. Farnsworth said plant officials and workers are “in the midst of transforming” the operation by “clearing up the floor space” in a manner that results in increased productivity and lowered production costs. And after “not spending a dime in the plant for years,” the company has invested more than $800,000 in improvements since August 2013.

“The result of all that is that we could bring in some other work ... some new lines,” Farnsworth explained, adding that national economic conditions which look good for the industry include hope for plant expansion.

While he notes that there are no guarantees in any business, Farnsworth said he does not see Trane leaving Fort Smith anytime soon.

“The message I’d like for you to tell in your story is that we’re here and we’re committed to being in the community,” Farnsworth said. “You don’t spend the kind of money we have and do the things we’re doing if you’re just going to do that (leave town).”

WILD TURKEY JOBS
What is leaving town are 14 jobs related to the bottling of Wild Turkey being moved from  the Pernod Ricard plant (formerly Hiram Walker) in Fort Smith to a recently constructed bottling plant in Lawrenceburg, Ky.

Fortunately, the plant will remain with about 216 jobs.

Pernod Ricard, a liquor bottling and packaging company that moved to Fort Smith in 1981 under the Hiram Walker moniker, had around 240 jobs in early 2012. The company also operated with 40 to 100 temporary employees each day, depending on the work load, according to a December 2011 speech by Plant Manager Melissa Hanesworth.

She said in the 2012 speech that the plant came critically close to shutting down when “major players” in the liquor industry began to consolidate. In the consolidation, Allied Domecq, a United Kingdom company that owned Hiram Walker, was bought by competitors Pernod Ricard and Fortune Brands. The two competitors divided up the assets of Allied Domecq, with Pernod Ricard now owning the Hiram Walker plant.

The plant’s future was again uncertain in 2010 when the Wild Turkey bourbon brand was sold to another company. Hanesworth said the Hiram Walker plant was already operating at about 50% capacity, and the Wild Turkey brand represented about 15% of the capacity. The company that bought the Wild Turkey brand decided in 2012 to build a plant to bottle Wild Turkey. That move resulted in Wednesday’s (March 19) announcement of the 14 job losses.

Hanesworth noted in the press release that loss of the Wild Turkey production had been anticipated.

“As part of that process, some employees who left the company over the last 18 months were not replaced. Regrettably, however, some job loss was unavoidable,” she said in the statement.

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Hanesworth said no further job losses are expected. The plant also produces Pernod Ricard’s Seagram’s Gin, Kahlua and Hiram Walker Liqueurs.

THE MANUFACTURING JOBS PICTURE
Preliminary estimates from the U.S. Bureau of Labor Statistics show 18,200 manufacturing jobs in the Fort Smith metro area in January. That’s down from 18,400 in December and down from 18,300 in January 2013.

The estimated January manufacturing employment also is down 36.1% compared to January 2004 employment of 28,500. The January employment is the second-lowest employment level in the sector in modern history. The lowest level was 18,100 which was recorded in February 2013.

Average annual employment in the sector in 2013 was at a multi-decade low of 18,300. The record average annual sector employment was 31,700 in 1999. The average fell below 30,000 in 2002, fell below 25,000 in 2009 and fell below 20,000 in 2012.

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