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Omnova Sells Columbus Plant, Layoffs Imminent

Union President Jay Lawrence with other on strike workers at the union hall by Omnova

Omnova Solutions announced Tuesday that they have sold the production part of the Yorkville Road plant, which primarily produces commercial wallcovering products, to a New Jersey Company: J. Josephson, a private company based in South Hackensack.
J. Josephson plans to use the Columbus plant as a distribution center. The production part of the plant will continue to make wall coverings for the next 12-15 months in a transitory period, but after that , the plant will cease to create any new products. This will cause the elimination of over 100 jobs for the Columbus area. The sale includes printing cylinders, equipment, trademarks, contracts and Columbus assets associated with Omnova’s wallcovering brands.
Currently about 225 people work at the plant, which has been around since 1963. In May of 2010, Omnova faced issues when 170 union employees went on strike, stating they would not sign new contracts that would cause them to lose seniority, shift rights, incentives, benefits and wages. Omnova hired 140 replacement workers, but the original 170 workers remain on strike today.
The National Labor Relations Board has been petitioned by the new workers and Omnova to de-unionize Omnova, and the decision is pending.
“Currently we’re still on strike,” said Union President Jay Lawrence. “We’re waiting on information from the company, we have not been discharged or terminated yet. We don’t know what position this all leaves us in.”
Lawrence said he doesn’t have much hope for the future of his 170 strikers or the current 200 plus employees of the plant. According to him, it would only take a couple dozen employees to operate the distribution center and it would not be very profitable for Columbus.
“The revenue of a distribution center is minuet,” said Lawrence. “All we would be doing is handling a product, the revenue is in creating it.”
Lawrence says the plant might be maintaining its distribution center to keep from having to pay high land clean-up fees. “It’s very common practice for plants that use chemicals in their product to move to a distribution center instead of shutting down so they don’t have to clean up the ground and deal with environmental companies.”
The news of the sale concerns many community members, who fear for the impact on the local businesses and the city who garner a large amount of their funds from the plant.
According to Lowndes County Tax Assessor Greg Andrews, the community will really feel the absence or decline of funds generated by Omnova. The company pays $742,654.93 in taxes to the area on a yearly basis. Of that, $202,731.44 goes to the City Council and Mayor; $195,812.56 goes to the Board of Supervisors; and $344,110.93 goes to the local schools.
Andrews says the schools will feel the hit the most. “This would have a tremendous impact on the city and the city schools, especially the city schools. Everybody is fighting budgets from last year, and losing $344 thousand is not going to be a pretty scene,” he said.
He also said that the impact losing Omnova could be bigger than the city thinks. “Over the last four or five years, the county has been growing at a rapid pace and the city has been still and even declining in value. The county has been getting all the contracts, Paccar, industrial accounts, Sever(Stal), American Eurocopter… in value and taxes the county is growing. This declining value is just going to widen the gap between the city and the county.”
Andrews said that if a company were to invest 1 million dollars, they would have to pay about $22 thousand in taxes to the city, but if they were to invest that same amount in a company in the county, they would pay only $11 thousand in taxes. He postulates that is the reason for the widening gap in tax funds. “The further you widen that gap between county and city value, the worse off the city is going to be,” he said.
Todd Gale, Columbus Light and Water Department general manager said they will also be hurting from the loss of revenue produced by the plant’s energy usage.
“Because of privacy issues, I cannot tell you what their bill is, but they are one of only two customers in the city that make up about 10 percent of our billing. They are one of, if not the biggest customer of the light and water..
“If the plant were to close, it would impact our bottom line by about a quarter of a million dollars on a yearly basis,” he said.
To deal with the loss of funds, Gale says CL&W will be “tightening our belts and streamlining processes.” Fortunately, he said that it will most likely not trigger any kind of rate increase or layoffs. “We’ll find other ways to meet operating costs,” he said. “We hate to see Omnova go, they have been very good customers of ours for a long time.”
Omnova Solutions, which is headquartered in Fairlawn, Ohio, is a mulit-national company with sale of $1.2 billion and over 2,300 employees. Omnova produces commercial wallcoverings, upholstery fabrics and laminates provide the finished surfaces for furniture, walls, vehicle seating and a variety of other uses, according to their website.
Omnova was unavailable for comment on the sale after multiple attempts by The Packet. However, Kevin McMullen, Omnova Solutions’ chairman and CEO released this statement to the press. “While our presence in Columbus will be reduced, we are pleased that our distribution operations and our ties with the community will continue. Columbus has been an important part of the Omnova story since the plant first opened in 1963 and we value the long-standing local government and community support.”
Omnova “will receive approximately $10 million in cash and three years of royalty payments for future sales of Omnova-based patters. In addition, OMNOVA will retain approximately $7 million in net working capital and the cash flow associated with those assets.”
The plant will also be open to recruiting a company to buy or lease the manufacturing portion of the plant.

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2 comments

  1. Mac Martin

    Andrews says the schools will feel the hit the most. “This would have a tremendous impact on the city and the city schools, especially the city schools. Everybody is fighting budgets from last year, and losing $344 thousand is not going to be a pretty scene,” he said. Omnova and Domtar both closing within a year of each other. Tax base is getting smaller don’t you think? Somewhere we need to cut spending and quickly. Of course this needed to be done years ago but the city just kept on spending. Thanks Mr. Mayor and all the others involved in cutting spending. Ha! You talk about needing more money but you don’t thing about the people having to pay it. It is the unemployed, retired on social security, and the laid-off that will be asked to tighten their belts.

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