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Plant & Facility Downsizing, Closure & Related Layoffs, Regional Decline

(http://faculty.washington.edu/krumme/readings/plant_closure.html)


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Mass Layoffs (Monthly) (BLS) || Mass Layoff Statistics

"The Mass Layoff Statistics program is a Federal-State cooperative statistical effort which uses a standardized, automated approach to identify, describe, and track the effects of major job cutbacks, using data from each State's unemployment insurance database. Establishments which have at least 50 initial claims for unemployment insurance (UI) filed against them during a consecutive 5-week period are contacted by State agencies to determine whether those separations are of at least 31 days duration,..."

DBM: Planning a Downsizing: A Checklist of Essentials [DBM]

Shutting Down and Bankruptcy

As long as the firm produces something, it will maximize its profits by producing "on the marginal cost curve." But it might produce nothing at all. When will the firm shut down?

  • Military Base Closures:

    The Story Of Scott Paper March 11, 1996 (Downsizing the American Dream: A Staff Report of the House Democratic Policy Committee)

    They call Al Dunlap "Chainsaw Al" because he prides himself on his reputation as a ruthless corporate downsizer -- who knows how to get stock prices up. Instead of downsizing a company, some wags now talk about "Dunlapping" a company. Indeed, Business Week has dubbed him the "Corporate Shredder."
    Dunlap was named the CEO of Scott Paper on April 19, 1994. Twenty months later, in December 1995, he sold the company to Kimberly-Clark. What happened during those 20 months bears examining.

    Plant Closures in Multi-Plant Firms:

    Stafford and Watts (1991) suggest that there are two basic types of such closures:

    1. Cessation closure
    2. Selective closure
    "Unlike classifications based on motivation, these categories are derived specifically from the geographies of plant closure within multi-plant closure within multi-plant firms."

    Dislocated Workers:

    Clippings:

  • Recent layoffs at area technology companies (Seattle PI Oct 02)
  • Recent layoffs at local companies (Seattle PI Oct 02)

    No end in sight to N.C. job losses - Part 1, August 18, 2002 The News & Observer (Raleigh, N.C.) by Karin Rives, Staff Writer, Computer Assisted Reporting Series

    After 30 years in a Cabarrus County textile factory, Shirley Chapmon is out of a job. To understand why, it helps to take a trip to the Wal-Mart Supercenter in Concord just a few miles down U.S. 29 from the massive red-brick Fieldcrest Cannon Plant 1 in Kannapolis, where she was laid off in October. Stacked on the shelves are bath and kitchen towels that Fieldcrest once made in North Carolina. Now they're woven in India and Pakistan. Fieldcrest and its parent company, [View the full-text article, 1838 words, by subscription only]

    Anatomy of a layoff: At Onyx, bad news was swift, respectful ; Seattle Times, April 22, 2001 By Luke Timmerman Seattle Times Eastside business reporter

    Those who were let go handed in company keys and cards, got a packet with benefits, severance and job hunting information and, in most cases, had about 15 minutes to put personal things in boxes and leave. There could be no hugs and goodbyes.

    The corporate downsizing phenomenon that rattled workplaces in the early 1990s is making a ... comeback ... Yet despite the rash of planned job cuts, the actual toll on workers and the economy from the current downsizing wave is so far proving less severe than the early-90s version.

    A changing economy. Wapato: Industry is waning The Daily (UW), November 24, 1999

    Downtown Wapato has suffered many businesses closures and is the area of the revitalization project. The UW group has plans of planting trees and repaving the sidewalk in hopes of making the downtown area the community hub.

    LAYOFFS (Boeing) Lehrer, Online Newshour, Ch.9, PBS December 29, 1998; Rod Minott of KCTS-Seattle reports on the layoffs at Boeing in Seattle.

    In early December, Boeing made the stunning announcement that it would eliminate 48,000 jobs over the next two years. That's 20,000 more than what the company had said it would cut last summer. The loss of jobs will reduce Boeing's work force by 20 percent. Workers coming off the day shift at the 737 plant near Seattle blamed senior management for causing the layoffs." incl. also Charles Hill, Dick Conway and others.

    Japanese firms hit hard by memory-chip glut, [Plant closure in Puyallup] Seattle Times, Friday, September 11, 1998, by Joe Heim

    "With global computer sales on the rise, Matsushita Electric Industrial's decision this week to close its computer-chip manufacturing plant in Puyallup and lay off 340 workers may have caught some people by surprise. Although the computer market is relatively strong, the closure stemmed from an unprecedented glut of computer chips..."

    737 plant gets no-layoffs pledge Seattle Times, Thursday, August 13, 1998, by Stanley Holmes

    Boeing has given union machinists a "no layoffs" promise at the 737 plant in Renton through 1999 to ease concerns over moving some assembly of the jetliner to California."

    Adobe to fire 300; 3rd-quarter loss seen, Seattle Times, Wednesday, August 12, 1998; by Bloomberg News and Seattle Times staff

    "LOS ANGELES - Adobe Systems, the top maker of desktop graphics software, saw its stock plunge today after it warned it may report a loss for the third quarter and will fire as many as 300 employees, or 10 percent of its work force, as Asia's financial slump slashes demand."

    Boeing to make engineering cuts; Seattle Times, Friday, June 19, 1998; by Polly Lane

    "Boeing Commercial Airplane Group plans to reduce its engineering ranks by 10 percent, or about 1,500 jobs, in the Puget Sound area by year's end, as the company begins paring its payroll after several years of increases. The engineering cuts will be part of a previously announced plan to eliminate at least 12,000 jobs throughout the commercial airplane group in the next six months."

    End of the `Chainsaw Al' era? Seattle Times, Tuesday, June 16, 1998 by Davan Maharaj Los Angeles Times

    The firing of Al Dunlap - an executive who became the symbol for brutal layoffs and plant closings to boost corporate profits and who was ousted over the weekend as chairman and chief executive of appliance maker Sunbeam - signals what many management gurus say may be the demise of the slash-and-burn turnarounds of the '90s.

    Strike forces GM plant closings Seattle Times, Tuesday, June 9, 1998, by Brian S. Akre

    DETROIT - A strike at a General Motors Corp. parts factory had closed five assembly plants and idled about 15,000 workers today and its effects were expected to spread unless a settlement is reached. Plants in Michigan, Kansas, Ohio and Ontario were idled because of a parts shortage caused by the strike by nearly 3,400 United Auto Workers members at GM's Flint Metal Center, north of Detroit.

    Intel to cut 600 jobs at DuPont facility Seattle Times; Thursday, May 28, 1998 by Thomas W. Haines

    "Two years after a job fair for Intel's Washington plant drew 3,000 applicants, the company has decided to close manufacturing operations at its facility in DuPont, Pierce County. About 600 jobs are expected to be phased out. Intel research-and-development teams, which include about 1,200 employees, will remain at the DuPont site."

    Facing the inevitable: Bumper stickers in Port Angeles read: 'Millworkers are an endangered species, too!' Seattle Times, Nov. 5, 1996; By Christopher Solomon

    For nearly 70 years, the smokestacks of the Rayonier mill have scented the air in this Olympic Peninsula lumber town with a faint, sulphur-like smell. To this city of 18,500, that smell was jobs. Sometime next year, the odor will go away, and so will the jobs. Two weeks ago, Rayonier, Clallam County's largest private employer, said it would close the pulp mill in the next eight months, throwing 365 employees out of work.

    Literature:

    Some older (pre-1990) literature on plant-closings, layoffs and notification

    Bowden, Joe. “The Anatomy of Plant Closing." Personnel Journal May 1992: 60-66

    Brookings Briefs: A Prescription to Relieve Worker Anxiety

    With the sharp slowing of the economy, worker anxiety is back in the news. But even during healthy economic times such as the late 1990s, workers feared layoffs and general job instability.

    Candell, Amy and Matthew B. Krepps. Industrial Inefficiency and Downsizing: A Study of Layoffs and Plant Closures. New York. Garland Publishing, 1997.

    Deily, Mary E., "Investment Activity and the Exit Decision," Review of Economics and statistics, Vol.70, 1988, pp.595-602.

    Deily, Mary E., Capacity Reduction in the Steel Industry. Ph.D.Diss, Harvard University 1985 (194pp.) [Dissertation Abstracts International 47, July 1986]

    Gereffi, Gary, David Spener, and Jennifer Bair. Free Trade and Uneven Development: The North American Apparel Industry after NAFTA. Temple Univ. Press, Philadelphia 2002. [pp.147ff. "Post-Nafta Plant Closures and Layoffs"] [HD9940 N72 F74 2002]

    Golembiewski, Robert T., "Lessons from Downsizing: Some Things to Avoid and Others to Emphasize," (pp.435ff.) in: Golembiewski, Robert T., ed., http://www.dekker.com/servlet/product/productid/0321-9"> Handbook of Organizational Consultation, Second Edition, Revised and Expanded. New York: Marcel Dekker, Inc. Series Volume: 81 (2000) [HD69 C6 H363 2000/Suzz] [Part of the Public Administration and Public Policy series]

    Gombola, Michael J. and George P. Tsetsekos, "Plant Closings for Financially Weak and Financially Strong Firms," Quarterly Journal of Business and Economics 31(4), Autumn 1992, pp.69ff.

    Haas, Gilda. Plant Closures: Myths, Realities, and Responses. Boston. South End Press, 1985.

    Howland, Marie. Plant Closings and Worker Displacement: The Regional Issues. Kalamazoo, Michigan: Upjohn Institute, 1988.

    Kirkham, J.D. and H.D.Watts, The Influences of Plant Profitability on Plant Closures in Multi-locational Firms, Growth & Change, Fall 1997, 28(4), pp.459-74.

    .. the firm is selecting (plants for closure) between different sites undertaking similar production activities... Analysis of interview data shows that plant profitability is the key to understanding only one-third to one-half of selective closures and that decisions taken by subsidiaries are more likely to rely on plant profitability measures than decisions taken at the corporate head office. ...the absence of (plant profitability) is not necessarily an indication of an assured future for a plant.

    Kirkham, J.D. and H.D. Watts, Multi-locational manufacturing organizations and plant closures in urban areas. Urban Studies, 35, 1998, 1559-1575.

    Kodrzycki, Yolanda, The Cost of Defense-Related Layoffs in New England," New England Economic Review, March/April 1995.

    Krumme, G., Anticipating Plant Closures: The Role of Advance Notification, (1988+)

    Leahy, Peter. “Plant Closings: a Comparison of Natural Disasters.” American Journal of Economics and Sociology July 1992: 333-350

    Lee, Raymond M,. ed. Redundancy, Layoffs, and Plant Closures: Their Character, Causes, and Consequences. Wolfeboro, New Hampshire. Croom Helm, 1987.

    Lomi, A. and E.R.Larsen, "Failure as a Structural Concept: A Comutational Perspective on Age Dependence in Organizational Mortality Rates," in: Lomi, Alessandro and Erik R. Larsen, eds., Dynamics of Organizations: Computational Modeling and Organizational Theories. American Association for Artificial Intelligence, AAAI Press/ M.I.T. Press, 2001, Chapter 9, pp.269ff. [HD58.7 D96 2001/Suzz]

    Martin, Philip. Labor Displacement and Public Policy. Massachusetts. Lexington Press, 1983.

    McKinley, W., Decreasing Organizational Size: To Untangle or Not to Untangle, Academy of Management Review, 17, 1992, 112-23.

    Norton, R.D., ed., Regional Resilience and Defense Conversion in the United States. Research in Urban Economics, vol.11, Greenwich, Conn., JAI Press 1997. [Ref.in JEL June 1998, p.1103]

    Patch, Elizabeth P., Plant Closings and Employment Loss in Manufacturing: The Role of Local Economic Conditions. New York. Garland Publishing, 1995.

    Persky, Joseph and Wim Wiewel. When Corporations Leave Town: The Costs and Benefits of Metropolitan Job Sprawl. Detroit: Wayne State University Press, 2000. [HC108.C4.P47.2000]

    Andy Pike, Building a Geographical Political Economy of Closure: The Case of R&DCo in North East England, Antipode, Volume 37 Issue 1 Page 93 - January 2005

    "ParentCompany's decision to close R&DCo in North East England caused the loss of highly skilled scientific and technical jobs... The economic and social costs of closure were acute for the North East with its relatively weak growth, high unemployment and limited R&D activity."

    Ramu, S.Shiva. Restructuring and Break-Ups: Corporate Growth through Divestitures, Spin-offs, Split-ups and Swaps. New Delhi: Response Books. 1999 [HD 2746.5 S544 1999]

    Stafford, Howard A., Manufacturing Plant Closure Selection within Firms," Annals Assoc. of American Geographers, 81 (1991), 51-65.

    ---, "Geographic Implications of Plant Closure Legislation in the United States," in Gibbs, D., ed., Government Policy and Industrial Change. London: Routledge, 1989, pp.95-116.

    Stafford, Howard, Geographic Implications of Plant Closure Legislation in the U.S.. In: D.Gibbs, ed., Government Policy and Industrial Change. London: Routledge, 1989, 95-116.

    Stafford, H.A. and H.D. Watts, "Local Environments and Plant Closures by Multi-locational Firms: A Cross-cultural Analysis," Regional Studies, 25(5), 1991, 427-38.

    Stanley, William, "Milltown without its Mills: Preliminary Assessment of the Consequences of Industrial Abandonment," Ch.16 in: Heikki Jussila et al., eds., Globalization and Marginality in Geographical Space. Aldershot: Ashgate, 2001, pp.205ff. [HD73 G56 2001/Suzz]

    Sutton, Robert I. and Thomas D'Aunno, Building a Model of Work Force Reduction that is Grounded in Pertinent Theory and Data: Reply to McKinley, Academy of Management Review 17(1), 124-37.

    Vetter, Richard. “Jobs and Plant Closing Legislation.” American Enterprise January-February 1994: 12-15

    Watts, H.D. and H.A. Stafford, "Plant Closure and the Multiplant Firm: Some Conceptual Issues," Progress in Human Geography 10(2), 1986, pp.206-27.

    Other plant-closing literature by Doug Watts:

    Contributions to Bibliography by Ryan Forstrom (Member of Geography 450/1999) are acknowledged

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