New England Regional Plant Watch: 2008 Closure Rate Drops 34% from 2007

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--It is difficult to find a positive angle when the topic is manufacturing plant closures. But a tiny ray of light emerges when analyzing the New England region (Source: Industrial Info's Industrial Manufacturing Industry Coverage). Despite the fact that 19 sites are set to close throughout 2008, that figure represents a sharp drop of 35% from the 2007 loss of 29.

Click on the image at right to see a list of plant closures in the New England region.

The 19 plants set to close in 2008 represent a potential job loss of 3,000, which in itself represents another major decrease of 46% from last year's loss of 5,529 jobs in the region. Every state in the region, which comprises Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, stands to lose at least one site.

When it comes to the highest number of plant closures, Massachusetts claims that unfortunate distinction, as was the case in 2007. The state is poised to shed 10 sites and nearly 1,400 jobs before the year is out. But the numbers are still not as bad as last year, when the doors closed on 16 plants and 3,260 jobs. The largest plant to close in Massachusetts is Schweitzer-Mauduit International Incorporated's (NYSE:SWM) (Alpharetta, Georgia) pulp and paper mill in Lee, a site that employs 350. The mill opened in 1962 and is scheduled to close at the end of the year.

Connecticut is a distant second in terms of plant closings, with four sites closing, resulting in just less than 500 jobs lost. The good news is that it is substantially less than the 2007 figures of six plants closed and 944 out of work. The Beiersdorf Incorporated (Wilton, Connecticut) plant in Norwalk is causing the biggest impact, with 250 employees out of a job when the facility closes in December (Source: Pharmaceutical Tracker - Online Database). The site opened in 1950 and manufactures lotions and creams.

The remaining sites targeted for closure are located in Rhode Island (two facilities, 600 employees), Maine (one facility, 250 employees), New Hampshire (one facility, 180 employees) and Vermont (one facility, 108 employees). The plants are either already closed or will be before the end of the year.

The Pharmaceutical & Biotech Industry was the biggest casualty in the region for 2008. Losing six sites compared with the 2007 tally of three, more than 940 jobs were placed in jeopardy this year. The closing of Alkermes' (NASDAQ:ALKS) (Cambridge, Massachusetts) 100,000-square-foot plant in Chelsea, Massachusetts, was a blow to the town, which was counting on it to spur further investment. The company decided to shut down the three-story building in which it had invested $40 million to renovate, following the discontinuation of the clinical trials for an inhaled insulin product it was developing with Eli Lilly (NYSE:LLY) (Indianapolis, Indiana).

The Industrial Manufacturing Industry claimed the second spot with 903 jobs lost as result of five plants closing. This is considerably less than in 2007, when 13 were closed and more than 3,800 people lost their jobs.

Not all of the plants will close their doors forever. Some will be sold and within the same sector, many existing jobs will be retained. Ironically, that was the case with the Alkermes plant in Chelsea, as it was once the site of another biotech operation. Others will be reopened after undergoing renovations to accommodate new owners and products that, in turn, may replace some of the lost jobs.

The region currently has more than 1,500 operational plants as found in Industrial Info Resources' New England Online Plant Directory. The existing plants provide employment for more than 318,000 people in the region. With all of the major industrial groups represented in the region, the majority of existing operational plants are claimed by the Industrial Manufacturing sector, which employs more than 175,000 in 474 plants. A distant second place falls to the Food and Beverage Industry, with roughly 200 facilities employing nearly 32,000. The rest of the operational sites are distributed among other groups, including the Pharmaceutical & Biotech Industry with more than 170 sites employing nearly 50,000 people, and the Pulp and Paper industry is on board with more than 170 facilities and 23,000 jobs.

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