The fight is on to keep the area’s manufacturers

Officials hope to tilt New Era’s choice in Derby’s favor

By Matt Glynn
News Business Reporter
Updated: December 12, 2009, 10:21 PM /

New Era Cap Co. is poised to make an important decision about its manufacturing operations.

The Buffalo-based hat and apparel maker will choose between its plant in Derby or one in Demopolis, Ala., as it consolidates its U.S. production into one site.

The threat of losing another manufacturer to lower-cost Southern locations is nothing new to the Buffalo Niagara region. Through October, the region was averaging 54,580 manufacturing jobs this year, down 35 percent from 15 years ago, according to state Labor Department statistics.

But economic development officials and local leaders say manufacturing remains a source of strength for the region and retaining jobs in that sector is a priority. New Era’s case has the added significance of a homegrown company with nearly a century of history.

“It’s very important for our economy that we keep our jobs here,” said Evans Town Supervisor Fran Pordum. “We’re talking about a well-respected and known brand throughout the world.”

Although a relatively small company, New Era brings a sense of pride and prestige to Buffalo Niagara. It makes all the hats used by Major League Baseball teams and their minor- league affiliates, and its logo shows up during televised games in many MLB teams’ dugouts. It also produces a variety of hats for colleges and universities, and for celebrities like Spike Lee.

The issue at the forefront for New Era today is something vital if less glamorous: the future of its U.S. jobs and manufacturing.

Examples abound of Buffalo-area manufacturing jobs that have vanished, either through cutbacks or closings. General Motors’ Town of Tonawanda engine plant has sharply reduced its work force in recent years. Contintental Automotive Systems is finishing a three-year phaseout in Elma. In Perry, jobs at American Classic Outfitters are at risk over Adidas’ decision to move production of NBA game-day jerseys to Thailand.

Nallan Suresh, a University at Buffalo professor who tracks manufacturing, said Buffalo Niagara’s manufacturing infrastructure and skilled work force are two factors in favor of New Era keeping the Derby plant open.

Suresh has provided workshop training in the past to New Era, and has taken his students to visit the plant in Derby. While he doesn’t have inside knowledge of New Era’s plans, he said he feels Derby has the upper hand. And he says he’s not just being loyal to the area in saying so. “I think it makes good business sense as well,” said Suresh, who is professor and chairman of operations management and strategy at UB’s School of Management.

New Era’s plan to close one plant also has stirred concerns in Alabama, with a significant number of jobs at stake there. And officials in Western New York and Alabama are talking up the importance of maintaining those positions.

The Derby plant has 334 employees and the Demopolis site has 355. Both figures include workers who are on layoff due to volume reductions.

To outside observers, the Derby plant would seem to have an edge, with the company’s hometown roots and the corporate headquarters only 20 miles away. But company spokesman Paul Gallagher said the company wants to make the “best business decision” and does not plan to announce its choice until mid-February to early March 2010.

New Era has already decided to close a plant in Jackson, Ala., in early 2010, as part of a plan to cut its number of U.S. plants from three to one. It will also close a distribution center in Mobile, Ala., in the second quarter.

New Era officials met last week with Communications Workers of America union representatives in Demopolis, and the company plans to meet with CWA representatives in Derby this week, said Dave Palmer, the union’s director for Upstate New York and New England.

The Teamsters represents workers at the two Alabama facilities that will be closed, and the company and union have agreed on the benefits workers will receive after they lose their jobs.

Gallagher said New Era is considering a host of factors in choosing between the Derby and Demopolis plants, including productivity, efficiency and seniority. The company says it is cutting back because its level of consumer demand can no longer support three production plants. More here.