SABIC plans to close Thorndale plastics factory
24 September 2015
Workers at a longtime Thorndale plastics manufacturing factory have been put on notice their plant will close barring unforeseen changes in market conditions.
SABIC Innovative Plastics, which took over the plant when it bought GE Plastics in 2007, indicated the facility was a victim of geography.
“SABIC constantly evaluates our product offerings to ensure we continue to meet the needs and expectations of our customers. Over the past several years, SABIC’s customer base, who purchase unique LNP compounds, is increasingly located in the Pacific, and this trend is expected to accelerate,” a company statement provided to the Daily Local News said. “These customers continue to request local production in the Pacific and shorter lead times to rapidly meet the constant demand for the latest consumer electronic devices.
“Customer preferences combined with flat growth for America’s LNP product demand has been preventing SABIC’s specialty compounding facilities in the Americas from operating at rates approaching full capacity,” the company statement said.
Jack Costa, the international staff representative for the union that represents workers at the South Bailey Road factory, said the union is preparing for a March shutdown. It has already had one negotiating session on closing conditions, he said.
“Every indication is their intent is to close,” Costa said. “
Workers at the western Chester County plant were taken by surprise when they received notice from the company on Friday, said Todd Sabocsik, unit president of United Steelworkers Amalgamated 1165-07, which represents the hourly workers there.
“It was a total shock to everybody,” Sabocsik said. “We were caught totally off guard. The business has always had its ups and downs. We were working overtime up until a few weeks ago.”
Sabocsik on Wednesday said 42 workers at the plant are represented by the union; the company said 51 workers in total will be affected by the closing.
The workers in the factory are older and experienced, the unit president said.
“I’ve been there 16 years and I’m the lowest in seniority,” Sabocsik said. “You have people who have been there 40-plus years, 30 years ... ”
SABIC sells plastic pellets made in Thorndale through its Innovative Plastics business to companies that make parts for smart phones, computers, printers and automobile electronic systems.
Shelia Naab, a company spokeswoman, said the decision to close is not final, that the company would keep it open if it could be convinced that the market in the Americas would improve.
“We’re open to hearing what the union has to say,” Naab said.
And in the statement, SABIC said: “We will be available to discuss this tentative decision with the local union before any decision regarding the potential closure is finalized.”
Union leaders, however, weren’t optimistic, noting the conditions leading to the company’s decision are out of its control.
“Anything is possible at the table,” said Costa, adding, “the company has put the union on notice of its intention to close as of March 2016. Its’ tough, we’re going to do the best we can for the workers.”
In addition to increasing production at sister facilities in the Pacific, SABIC said it will increase production at its Columbus, Ohio and San Luis Potosi, Mexico sites to make up for the closing of the Thorndale plant.
“It is important for everyone to know that this tentative decision is not a reflection on the great work and dedication of our employees,” the company said in its statement. “We have wonderful employees and we are grateful for all of their work and commitment to the business. Rather, it reflects a strategic action that will enable us to meet our customers’ demands while maintaining our leadership position in an increasingly competitive compounding industry.”
A final decision will be made within 60 days, Naab said.
Employees at SABIC’s offices in Exton are not affected by the restructuring, Naab said
SABIC’s Innovative Plastics business is based in Pittsfield, Mass. Innovative Plastics is a multi-billion-dollar company with operations in more than 35 countries and approximately 9,000 employees worldwide. It is a wholly owned subsidiary of Saudi Basic Industries Corp., or SABIC, based in Saudi Arabia.'