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The loss of Syracuse China is the loss of a signature piece of Syracuse lore.
Salina, NY -- In another blow to Central New York's slumping manufacturing sector, Libbey Inc. said Tuesday it will close its Syracuse China ceramic dinnerware factory in Salina in March, eliminating 275 local jobs.
Syracuse China, which makes dinnerware for restaurants, hotels and institutional customers, is one of the region's oldest manufacturers. It was founded in 1871 in Geddes as the Onondaga Pottery Co.
Libbey, based in Toledo, Ohio, said it will close the factory on or about March 27 to cut costs and improve efficiency.
"While considerable efforts have been made at Syracuse China to reduce costs, the operations continue to fall short of our strategic expectations," said John F. Meier, chairman and chief executive officer of Libbey. "This restructuring of Syracuse China will improve Libbey's competitiveness in 2009 and beyond."
Libbey also said it will close in May its Mira Loma, Calif., glassware distribution center, which employs approximately 30 people.
Company officials declined to discuss the specific financial details about the Syracuse China operation. Kenneth Boerger, Libbey's vice president and treasurer, said the company had undertaken initiatives over the years to try to make Syracuse China more efficient, but that the plant did not meet expectations.
"The factory has not met our strategic expectations and has under-performed financially," he said.
Libbey has 7,400 employees worldwide, including about 3,000 in the United States.
The announcement came as the company warned investors that its sales for the fourth quarter will be significantly lower than its previous guidance of $210 million to $220 million in sales, provided on Oct. 16. Libbey stock closed Tuesday at $1.75 per share, up 20 cents, or 12.9 percent, in trading on the New York Stock Exchange.
Meier said a recent and dramatic slowdown in the food service and retail industry, combined with weaknesses in the Mexican peso and declining consumer confidence in all markets, are expected to contribute to reduced sales.
"While sales were close to expectations through October, they deteriorated quickly in November," he said.
The closing of the Syracuse China factory on Court Street in Salina's Lyncourt area will not mean the end of the Syracuse China name. Libbey said it will continue to sell china under the Syracuse China name.
But adding insult to injury, the products to be stamped with the Syracuse China name will be imported from factories in other countries -- the very competition that has helped to drive most dinnerware products manufacturing out of the United States.
"To me, that's appalling," said Ed Kochian, deputy Onondaga County executive. "They bought the brand. It's not illegal. It just strikes me as a very, very sad twist for all those people who built that company."
Kochian said Libbey had given county officials no warning that the plant was in trouble.
"What this does to the work force -- 275 people and their families -- is pretty horrendous," he said. "The way they found out about it doesn't sound like it was very thoughtful."
Jim Gacek, a 17-year employee of Syracuse China and former president of Local 381 of the Glass, Molders, Pottery, Plastics and Allied Workers International Union, said the company waited until the day shift had left and the evening shift started to break the news to employees.
He said the news came as a surprise because management told the union in July that the plant was "back in the black" after a period of losses.
"They were saying we were making money," he said. "Not a lot of money, but that they were doing better."
Gacek blamed the plant's troubles on management at Libbey, a glassware company that bought Syracuse China in 1995 from Susquehanna-Pfaltzgraff Co. The recent economic slowdown only added to its problems, he said.
"Without a doubt, you've got people (in management) who don't know how to make pottery," he said. "They know how to make glass, but they don't know how to make pottery."
But Frank Caliva, director of talent initiatives for the Metropolitan Development Association, an economic development organization, said Libbey is the last major china maker still producing dinnerware in the United States. The others make it in China, where they can pay much lower wages, he said.
"They've done everything right over there," he said of the Syracuse China factory. "They've tried to add value every way they could."
During a strike by union members in 2006, Libbey said its Syracuse factory was not profitable and was in serious financial difficulties.
The company said it spent more than $40 million when it bought the plant and by 2006 had spent $25 million to modernize it. In 2005, Libbey took a $16.5 million impairment charge directly related to Syracuse China's poor finances and workers' compensation insurance costs.
After the five-week strike in 2006, workers agreed to accept a three-year wage freeze.
Wages at the plant range from $10.95 an hour to about $14 an hour. Under the union's contract with Libbey, workers will be given 25 hours of pay for every year of service, up to a total of 750 hours, said Gacek. Many employees have been working there for 20 to 40 years, he said.
The decision to close Syracuse China was unexpected but not a complete surprise given the global economy, said Randy Wolken, president of the Manufacturers Association of Central New York.
"We didn't have any indication that this was going to happen," he said. "This is a significant downturn across the globe. These kinds of things are happening across the country. We're not going to be immune."
Syracuse China's onetime competitor, Oneida Ltd., also could not compete with foreign-made goods. It closed its Buffalo China dinnerware factory in 2004 and its Sherrill flatware factory in 2005 and became an importer of products it sells under the Oneida name.
Salina town supervisor Mark Nicotra said the closing will be a tough blow to the town, not only because of the lost jobs but also because of the company's long history.
"Anytime I'm eating at a restaurant, I flip the plate over to see if it's from Syracuse China," he said. "Psychologically, no question, this will have a lot of people in the community hanging their heads."
But Salina has come back from tough blows before. After General Motors closed its Inland Fisher Guide auto parts plant, not far from Syracuse China, in 2003, and eliminated 1,300 local jobs, the facility was turned into a manufacturing and warehouse center. It now houses 18 companies employing 540 people.
Nicotra said the same could be done with the Syracuse China factory.
"We can't let it sit there and just rot away," he said.
Other examples of the redevelopment of large facilities after a major regional employer moved out or downsized include Electronics Park in Salina, Miller Brewery in Fulton, Griffiss Air Force Base in Rome and Hancock Air Force Base in Cicero.
"Unfortunately, we've gotten good at this," said Caliva. "We've had to get good at this."