The Monroe plant in Cozad will close next year, putting 500 people out of work, parent company Tenneco, Inc. announced Tuesday. It will be the end of 460 hourly and 40 salaried jobs.
“It’s been a real difficult day,” plant manager Chief Davidson said Tuesday afternoon, after breaking the news to employees all day.
“It’s like giving bad news to friends and family,” he said.
The Monroe plant opened 48 years ago and has been a fixture in the economy of Dawson County. It operated 24 hours a day, making shocks, struts and brakes for various makes and models of vehicles. The Monroe brand is highly recognized across North America.
Tenneco bought Monroe in 1977 and the plant prospered. In 2006, 730 people worked there. But the slumping automobile economy took its toll.
Tenneco laid off 125 Cozad workers in April 2008 to cut costs. In October 2008, Tenneco announced it would close four plants in North America and cut back operations at another. It named two plants to be closed -- one in Indiana and one in Ohio, but the Cozad plant remained open even though it was apparently on the chopping block.
Tennaco said Tuesday that the instability of the U.S. auto-manufacturing business in late 2008 and the near collapse of General Motors and Chrysler postponed the closures, but the situation now looks more solid.
“We now feel that industry conditions have stabilized enough for us to move forward on our original plans to consolidate our ride-control capacity in the United States,” the company said in a prepared statement.
“We sincerely regret the impact this action will have on our employees at Cozad,” said Gregg Sherrill, chairman and CEO, Tenneco.
Davidson said he and other plant executives began meeting with employees at 6:30 a.m., talking about how to deal with the closure.
Between 30 and 40 employees will probably be laid off during the next three months. After that, no one knows yet how rapidly the lay offs will continue, Davidson said. Tenneco said the plant will close by the end of 2010.
The company expects to transfer current business to other operations, including plants in Hartwell, Ga., Paragould, Ark., and Celaya, Mexico.
Davidson said those plants have room to expand, but Cozad has no spare floor space.
Another factor is the cost of shipping supplies such as steel and rubber to Cozad, compared to shipping costs to other Tenneco plants. And, Cozad is relatively distant from vehicle makers too, Davidson said. Rising fuel prices compound the problem.
“The automotive industry had changed radically,” he said. “Five years ago, no one thought GM or Chrysler would be in bankruptcy. There have been a lot of changes in the locations of vehicle manufacturers. They are 'diving down' to the southeast corridor of the U.S. Four years ago, that was not the case.”
After telling workers the plant would close, executives focused on ways to help them make a transition. Davidson said the company will offer a comprehensive assistance-separation package, with continuation of health insurance.
Plant officials are also contacting other Tenneco plants to try and match “our top notch work force in Cozad with their personnel needs,” Davidson said.
"We believe our workers are amoung the very best in the company,” he said.
Area employers will also be contacted, as will local and state officials, for job placement and retraining options.
Tenneco is a $5.9 billion global company, headquartered in Lake Forest, Ill. It has nearly 21,000 employees worldwide, according to the company website.
In the first half of 2009, Tenneco reported an adjusted net loss of $39 million, compared with an adjusted net income of $44 million in 2008.
Tenneco estimates the closing of the Cozad plant will generate $8 million in annualized cost savings once it is completed.