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Thu May 26, 2011
Covidien Plant in Commerce to Close, 309 Jobs Lost
COMMERCE – A global healthcare products leader that's been a significant player in the local economy is closing their doors, leaving more than 300 workers without jobs.
Covidien announced Thursday they will close their Commerce plant to maximize the company's efficiency.
Communications Director Rich Bevilacqua tells KETR the shutdown is part of a restructuring initiative established by Covidien in 2008, which was aimed at reducing annual expenses by $50-75,000 million.
"Since that time we have closed or reduced operations in a number of plants," Bevilacqua said.
He says the company has roughly 60 companies worldwide still in operation today.
Commerce Economic Development Corporation Director Bonnie Hunter says the city and employees had no idea the decision was coming.
"This was a shock to us... we were very stunned."
According to Bevilacqua, shutting down the Commerce plant is a reflection of restructuring, not the economy.
"This is simply a step to look at the types of products that are manufactured in Commerce. We have some capacity in some other plants. Most of this production is going to be transferred to other plants in the United States."
Thursday's announcement gives the 309 full-time employees anywhere from 18-22 months to pursue other work, with the first string of layoffs to begin in September, 2012.
"In the meantime we're providing outplacement, we're providing severance. We are also allowing employees in the plant to apply for positions elsewhere within Covidien."
There are no other Covidien plants in Texas. The company's U.S. headquarters is located in Mansfield, Massachusetts, with global headquarters in Dublin, Ireland. In 2010, the company brought in roughly $10 billion in revenue.
The Commerce plant was first opened in 1974 and purchased by Covidien, formerly Tyco Healthcare, in 1994. About one third of the employees at the plant live in Commerce, with the remaining two-thirds coming from communities within a 50-mile radius of the plant.
Bevilacqua added, "These are never easy decisions to make. The work that had been performed by employees in Commerce has been very good and solid work, but this is really just part of the overall manufacturing review that the company conducts to look to increase our overall efficiency and lower the costs, particularly in a market that is as competitive as it is today."
The news marks the loss of another giant industry in Commerce. In 2009, Zurn Pex shut down their facility due to a decline in the home building industry. 108 employees lost their jobs.