Performance Fibers to Idle Production at Two Factories

International competition and reduced demand from US tyre customers have led Performance Fibers Holdings, Inc. (Performance Fibers) to announce on March 26 its intention to halt all manufacturing at its Winfield and Scottsboro, Alabama factories. The company’s plans will see polyester fabric converting operations in Winfield and fabric dipping operations in Scottsboro idled, affecting a total of around 140 employees. The exact timing for the cessation of production will depend, says Performance Fibers, upon the transition period necessary to meet customers’ needs.

The decision to idle its full manufacturing operations at these two plants was, the company reports, caused by a number of factors, including lower consumer demand for cars, global competition, and higher raw material and operating costs over the last three years. These factors, combined with the restructuring activities of key tyre customers in North America, have resulted in lower overall demand for tyres.

“Extremely challenging industry and economic conditions have prevented the plants from being fully utilised since we acquired them in 2005,” said Performance Fibers’ CEO Gregory S. Rogowski. “Reduced demand now makes it necessary for us to take these difficult actions to remain globally competitive as a company.

“We deeply regret the impact this difficult decision will have on the Scottsboro and Winfield workforce, their families and their communities,” Rogowski continued. “As always, we are committed to treating all employees with respect and fairness, and we will work to make this transition as smooth as possible for affected employees.”

Performance Fibers states that the current conditions are similar to those that led to an idling of polyester fibre production at Scottsboro and a scaling back of its fabric dipping operation in 2006. The company adds that it has been taking steps to improve its competitiveness in the North American region, an environment is says is “particularly challenging” due to the entrance of low-cost suppliers from Asia and other parts of the world.

A 60-day notice have been given to affected Winfield employees, appropriate officials, and government agencies under the US Department of Labor’s Worker Adjustment and Retraining Notification (WARN) Act, through which training and other assistance available will be made. Performance Fibers also has requested government assistance for Scottsboro employees not covered by WARN due to the size of the workforce. In addition, the company says it will honour the contract requirements of unionised employees covered by bargaining agreements at Scottsboro and provide applicable benefits and assistance for Winfield employees.