Briggs and Stratton is closing their Murray operation by fall 2020. About 600 full-time positions will be affected. The Milwaukee-based company announced on Thursday plans to consolidate production of its small vertical-shaft engines to its Poplar Bluff, Missouri facility.
The Board of Murray Calloway County Economic Development Corporation said in a release on Thursday it "deeply regrets" the company's decision to close the Murray operation. "The company, with over 3 decades of operations in Murray, has been a respected and generous member of the community and their absence will be a serious impact to our local and regional economy," wrote MCEDC President Mark Manning. “Sadly, the closure means lost wages in the tens of millions of dollars, which could lead to the need for local increased social services to help affected families.”
Manning said city and county officials, as well as the Kentucky Cabinet for Economic Development and the Tennessee Valley Authority have worked behind the scenes for months to try to forestall the decision, including creating an incentive package to try to keep the plant open as well as a “substantial financial investment” offered to the company. “Unfortunately, market conditions forced the company to make hard decisions to reduce their manufacturing footprint and the decision was made to close this plant. The decision is, unfortunately, irreversible,” wrote Manning.
In a phone interview, Manning added one of the few positives of the situation is that a large pool of skilled labor will potentially be available to recruit new businesses to replace Briggs and Stratton, but that it may take time to determine whether the old plant building is usable itself.
“The skill sets at the Briggs and Stratton plant are primarily oriented toward metal fabrication. So that would be the ‘sweet spot’ where we would be looking to recruit,” Manning said. “There’ll have to be a due diligence process with the facility itself to see how marketable is that facility. I mean, it’s old.”
In a statement, the Murray-Calloway County Chamber of Commerce said the organization was “deeply saddened” that the Murray plant is closing and would work with the Murray-Calloway Economic Development Corporation to aid the transition.
Murray-Calloway Needline Food Project Executive Director Tonia Casey said her organization is available for assistance for impacted employees facing financial challenges.
‘That sends a wave of fear through anyone. And then to know you have to come into a social service agency to either ask for some help, such as food, or assistance with a utility -- that’s scary,” Casey said. “The community is going to have to pull together a little bit tighter, help a little bit more. Some of the workers will fall in between the cracks of receiving some of the assistance that Briggs will be able to offer. And we definitely don’t want anybody to fall.”
Briggs and Stratton said in a release the market for small vertical-shaft engines, used for machines including lawnmowers, has been stable over the last several years but has not grown for various reasons, including a difficult housing market driven by the lack of affordable single-family homes.
“If fewer people are buying homes or changing homes, fewer mowers are sold. And the peak of that was in 2006,” said Briggs and Stratton spokesperson Rick Carpenter, in a phone interview. “Decisions like these are very, very hard. So, we too are disappointed that we can no longer be in the Murray community and contribute to it.”
Carpenter said impacted employees will have the opportunity to relocate to another facility, and that the Poplar Bluff plant plans to hire about 130 jobs over the next year to accommodate increased production. Employees who decide not to relocate will receive severance pay, based on their years of service with the company, and career transition assistance.
"Our team in Murray has done great things over the three decades since the plant was established. We are grateful for their work and the support we have received from the local community and Commonwealth of Kentucky," said Todd Teske, Chairman, President & CEO of Briggs & Stratton Corporation, in a release.
The company anticipates an annualized pre-tax savings of $12 million to $14 million, with $10 million by fiscal year 2021. Total charges related to consolidation are expected to total $30 million to $35 million over the FT 2020 and 2021.