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Small towns suffer from Detroit's problems

by Matt Marquez
Jan 15, 2009



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Even the smallest villages in America can’t hide from the malaise afflicting Detroit.

Already reeling from dozens of layoffs, auto-parts plants in Cozad, Neb. and Hartwell, Ga., towns with populations of only 4,000, must now face the prospect of hundreds more out of work as Tenneco Inc. decides which town’s facility to close as part of a global restructuring program that already includes scheduled shutdowns in three other North American locations and one more in Australia.

The Lake Forest, Ill.-based auto parts-maker announced Tuesday that one of its ride-control manufacturing facilities in Cozad and Hartwell will be shuttered as the company downsizes in response to a shrinking automobile market.

But Tenneco also said that it will postpone the closing of one of the facilities, and also its decision about which one to close.

“This change will allow Tenneco to further preserve cash in response to the unpredictability of the current global economic crisis,” Tenneco CEO Gregg Sherrill said in the statement.

While Cozad and Hartwell still have hope for survival, Tenneco’s announcement Tuesday named an emission control plant in Emigsville, Pa. as less fortunate. It will close, along with facilities in Evansville, Ind. and Milan, Ohio. An engineering operation in Dunsborough, Australia will also shut down.

Tenneco said its restructuring program will save $58 million annually while costing about $31 million in restructuring-related charges. The company, whose products include shock absorbers and exhaust systems, posted $6.2 billion in revenue in 2007. More than a third of its sales that year were to General Motors Corp. and Ford Motor Co., although it also sells to foreign auto manufacturers.

Tenneco's plants in Cozad and Hartwell had already felt the ill effects of a weakened auto industry, suffering dozens of layoffs in recent months. But with news of the temporary respite about a possible shutdown, leaders in both towns are feeling a mixture of relief and apprehension.

“We’re excited at this point to still have 500 on staff,” said Robyn Geiser, executive director of economic development in Cozad. “Over 500 jobs with a town of population 4,000 - [a closing] would have a tremendous impact.”

But Cozad hasn’t been taking the threat lying down. Last December the town offered to spend up to $200,000, in addition to raising donations from community members, as an unsolicited incentive package for Tenneco, Geiser said.

Tenneco declined the offer, but Geiser said the postponement now means Cozad has an opportunity to improve its plant’s efficiency and prove it should stay open.

Geiser and other local leaders say they don’t hold a grudge against the company.

“I think automakers are tightening their belts to stay in business,” said Dawson County Commissioner Roger Bauer. “Of course that’s going to affect towns that make auto parts.”

The 4,100 residents of Hartwell, Ga. are as much in the dark as the people of Cozad. And they are just as worried.

“[Tenneco] is the largest employer in the community, and we hate to see anybody lose their jobs,” said Michele Dipert, president of Hartwell’s Chamber of Commerce. “It’s a trickle-down effect. If more people are unemployed, there’s less money to be spent, and restaurants and stores suffer less business.”

Hartwell Mayor Matt Beasley said that if the Tenneco plant closes, it would only compound the town's economic problems after several local textile factories have shut down over the last few years.

"My sister relocated to the other side of the state when her husband's plant closed down," Beasley said. "We're a strong community, but with the problems in the past we're going to have to look after each other."

Tenneco spokeswoman Jane Ostrander said the company has no timeline to decide which manufacturing plant will close.