Pat Mitchell, Ashe County manager and director of economic development, confirmed Tuesday afternoon that she had received a letter from Dwayne Howell with Gates Corporation outlining the planned closure of Gates’ second plant (in the old Sara Lee Knit Products building) in Jefferson.
According to the letter, said Mitchell, 83 employees will be affected by the change, as operations are shifted to locations in Missouri and Mexico.
The tubing being made down there is primarily for commercial Freightliner trucks and agricultural purposes and the home base is in Missouri, where some of the other Freightliner work is being done, as well as a plant in Mexico, Mitchell said the letter read.
Tornado victims came to Ashe
Gates in Jefferson took in some Virginia workers last year after a tornado ripped through Glade Spring destroying a Gates factory located there.
Temporary employees were added as the corporation moved most of the factory operations from Glade Spring to the former Leviton building located just below Gates.
Roughly 75 people from the Glade Spring plant were making the one-and-a-half-hour trip to Jefferson each day to work in the 100,499 square foot building that was donated to Ashe County Job Development by Leviton. Gates Corporation was renting roughly one-third of the building for storage, but chose to move the small hose production from the Glade Spring plant to Jefferson and rent the entire building.
The agreement at that time with ACJD was for Gates to use the facility for 90 to 120 days, and it was uncertain what the future held for the new manufacturing division that Gates had moved to Jefferson.
Reaction to planned shutdown
One Gates employee, speaking on condition of anonymity, said he and other workers at the plant had been offered a severance package - with what he considered a catch - Monday afternoon.
The outgoing workers must train the employees who will be taking their jobs.
“It’s not fair, I mean, it’s really not,” said the Gates employee. “This was just thrown on us, we didn’t even see it coming.”
The same employee said he was told in February or March that more jobs would be brought to the Jefferson facility in July or August, but the expansion never occurred.
Mitchell said it was her understanding that if some of the work goes to another country, in this case Mexico, then Trade Adjustment Assistance (TAA) benefits could be available to workers who are losing their job at Gates, though she had seen nothing in writing to confirm as of Tuesday afternoon.
The program, created by the Trade Act of 1974 and amended in 2002, provides funding and services to workers who lose their jobs due to increased foreign imports or, in this case, a shift in production to foreign countries that have signed Free Trade Agreements with the United States.
The North American Free Trade Agreement, which went into effect on Jan. 1, 1994, and created a free trade bloc between Canada, Mexico, and the United States, would potentially allow laid-off Gates workers to file for TAA benefits including job search allowance, relocation allowances, and certain waivers and training programs, the Health Coverage Tax Credit (HCTC), and Trade Readjustment Allowances (TRA).
The building Gates is vacating is owned by Ashe County Job Development, Inc., a non-profit organization formed in the late 1990s to handle the donation of this same building from the former Sara Lee company, said Mitchell.
ACJD accepted the building, Mitchell said, then sold it to Leviton, who donated it back when they abandoned it.
The ACJD will be marketing this building again, said Mitchell.
Last year, ACJD was awarded a $175,000 Golden Leaf Grant to renovate the building for Gates.
“We got the money after Gates was in the building and we were trying to do additional upgrades for them,” said Mitchell. Much of the renovation, she said, involved replacement of windows with more energy efficient models.
Some of that grant money has been spent, Mitchell said, but had to be paid out by ACJD and then reimbursed by Golden Leaf. She planned to be in touch with Golden Leaf soon to see about the reimbursement.
“It’s a significantly improved building,” said Mitchell. “Gates has also done a lot of work in the building. They’ve been a great tenant for that building and a great corporate citizen. While we hate to see this happen, it’s just part of doing business.”
Mitchell said there will always be fluctuation with companies as they adjust for the bottom line, and in a rural county like Ashe it pays to have programs, incentives and staff in place to work toward retention and recruitment of business.