MURRAY — Murray and Calloway County officials said Thursday that the announced closing of the Briggs & Stratton plant in Murray presents an opportunity for a comeback similar to what occurred in 2000, when another large facility closed and was replaced within months.
However, with the loss of 600 jobs being involved with the Briggs & Stratton facility, thoughts immediately turned to those employees and their families, first and foremost.
“I’ve been on the phone with two ladies (Thursday morning) whose husbands have worked there and one of them has been there for 30 years, the other for 24 years, and those ladies were upset and crying. That was where they were going to retire from, so it’s devastating, really,” said Calloway County Judge-Executive Kenny Imes of how Thursday began for him.
“I don’t know any other way of saying it.”
Murray Calloway Economic Development Corporation President Mark Manning said it is one of the toughest times he has experienced since coming to Murray in 2001. In fact, he said Thursday’s announcement came close to the anniversary of the day he arrived in Murray to assume leadership of the EDC, after the announcement a few months earlier that the Mattel toy-manufacturing plant in Murray was closing on the city’s north side.
“It’s like a death in the family,” Manning said. “Obviously, my heart and my prayers go out to the families, and the families are going to feel it, the community is going to feel it. You’re talking about a lot of people who have invested their entire lives in that plant, and it just breaks your heart. But I promise you, we are going to do everything humanly possible to turn this into a better situation. But no matter what good we can bring back from this, it takes time.”
When Manning arrived in ’01, it was ahead of something he said is rare: an immediate comeback. In Murray’s case, it was the persuading of the Pella Windows & Doors company of Iowa to bring one of its programs to Murray and fill the vacated Mattel plant for that purpose.
“It took just months,” Manning said. “Mattel was moving equipment out one end of the building when Pella was moving equipment in at the other end, and the Mattel-Pella situation is very helpful for us. We’re not panicking. We know what to do and we know how to do it.”
Kentucky 5th District state Rep. Larry Elkins (R-Murray) has been down this road before as well. He was only a few months into what would be a 21-year term as Calloway County judge-executive when word came that Mattel was closing. He said that day was similar to Thursday.
“Yeah, I’ve had a couple of phone calls too so far,” Elkins said Thursday morning. “Certainly, the opportunity is there for us. We’ve done this before, but it’s a very disappointing situation, with friends and neighbors losing their jobs. We just want to find a way to make their transitions easier.
“I’ll be on the phone (Thursday) talking to fellow lawmakers and I’ll also be in touch with the (administration of Gov. Matt Bevin) to see what incentives are in place to hopefully replace these jobs. It was a relative short time for those jobs to be replaced (after Mattel closed) so I would expect the same thing to happen this time.”
In announcing the closing Thursday morning, Briggs & Stratton, manufacturer of small vertical-shaft engines, mainly for lawn mowers, cited several factors for why it was closing the Murray facility and choosing to consolidate operations with a facility in Poplar Bluff, Missouri.
In a news release, Briggs & Stratton said that the market for small, vertical-shaft engines, while stable the past several years, has not grown. It said a difficult housing market driven by the lack of affordable single-family homes in the country is a factor in that other parts of Briggs & Stratton’s business makeup have thrived but the same is not true of the residential walk-behind mower market.
“Our residential engine business continues to be core to our company as we make progress on diversifying our business by growing our commercial presence. This production consolidation is important for the long-term health of this operation and will allow for better utilization of our assets by freeing up resources that we can use on growth areas within our company,” said Todd Teske, chairman, president & CEO of Briggs & Stratton Corporation. “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.”
Local officials said efforts had been ongoing with Briggs & Stratton for several months to keep the Murray plant off the chopping block.
“We worked together with the (Murray Calloway County EDC), the state, the county, many people, to make (Briggs & Stratton) select Murray to be one to keep,” said Murray Mayor Bob Rogers. “In the end, they chose to close it.”
Vivek Sarin, the interim secretary for the Kentucky Cabinet for Economic Development, also issued a statement Thursday discussing the state’s previous efforts to keep Briggs & Stratton in Murray and its ongoing efforts moving forward.
“With the decision made by Briggs & Stratton leaders to close the company’s manufacturing facility in Murray, Ky., we as state leaders are immediately shifting from a months-long effort to retain the operation and its approximately 600 jobs into a rapid-response mode,” Sarin said. “We will support employees and remarket the workforce, building, community and West Kentucky to attract new companies and further facilitate existing-industry expansions.
“In discussions (Thursday) with Gov. Matt Bevin and our cabinet’s leadership team, Briggs & Stratton executives were highly complimentary of Murray and West Kentucky’s workforce. Employees at the Murray facility have been key in making the plant Briggs & Stratton’s most efficient manufacturing operation system-wide, they said.
“It is clear the outstanding workforce and West Kentucky community played no part in Briggs & Stratton’s ultimate decision to close the plant. Rather, those were compelling reasons to make all efforts to remain.”
Sarin said Briggs & Stratton leaders told the cabinet that the decision to consolidate the Murray operations to the Poplar Bluff facility was about “realigning for a changing market.” The company told the cabinet that the Missouri plant has the “capability to create more efficiencies with significantly less reinvestment in equipment and restructuring than the Murray operation,” Sarin said.
In its news release, the company said it anticipates annualized pre-tax savings of $12 million to $14 million, with approximately $10 million recognized by fiscal year 2021. Total charges related to the consolidation are expected to total $30 million to $35 million over fiscal years 2020 and 2021.
“This corporate-level decision is unfortunate and will hurt families and the economy in Murray and West Kentucky,” Sarin said. “The nature of today’s fast-changing business world sometimes requires publicly traded companies to take actions based on a set of criteria that we at the state and local levels cannot ultimately influence. We know this has been a hard decision for Briggs & Stratton and the company’s leadership approached it with the utmost professionalism. We are grateful for Briggs & Stratton’s three decades of economic contribution to the state and for being a longtime pillar of West Kentucky’s business community. Going forward – as we simultaneously support the needs of employees and the community – our Cabinet will provide to the company assistance in its current transition.
Sarin said that despite the loss, there are “silver linings on the horizon.” He said the first positive point is that the closure is not immediate, which he said would provide time for his office and regional economic development partners to “make all efforts to attract a new tenant for the facility and help provide current employees a range of quality options to consider” as the plant shutters in phases across the coming year. The second point, Sarin said, is that the quality and expertise of Briggs & Stratton’s Murray workforce “creates a tremendous benefit for incoming companies seeking a mechanically inclined, engineering and manufacturing workforce.”
Sarin said the third positive sign is that there are currently multiple employers in western Kentucky that are expanding and creating new jobs, citing an announcement from Bevin and the cabinet last week that a $200 million new manufacturing facility would open in Ballard County.
Sarin added that Briggs & Stratton leaders had been “extremely complimentary” in a phone call Thursday morning of the efforts Bevin and the state made in recent months to retain the Murray facility and that they were also impressed with the cooperation between Manning and local elected officials and state leaders.
Murray State University students have utilized Briggs & Stratton for many years for part-time jobs that helped pay for their educations. Thursday, Murray State President Dr. Bob Jackson acknowledged this in a statement.
“We stand ready to assist the Murray Calloway Economic Development Corporation and particularly individuals who will be directly impacted through this closure,” Jackson said. “An important component of our institutional mission is to provide educational opportunities to further economic growth and workforce development. During circumstances such as these, our mission becomes even more critical.”
Thursday’s announcement came on the same day that Briggs & Stratton was experiencing a stormy day on Wall Street, where its stock tumbled 44 percent in morning trading, dropping from a starting point of 8.27 to finish at 4.59. This is its lowest point since 1975.
Economically, this will also pose a big blow to the local revenues. City of Murray Finance Director Kim Wyatt said the loss of Briggs & Stratton will mean a drop of $300,000 in combined payroll and property taxes for the city, as well as $55,000 that goes to the Murray Independent School District from property taxes.
Wyatt also said it will mean a loss of about $1 million in utility revenues like natural gas, water and sewer, as Briggs & Stratton is one of the city’s largest users of those services.
In addition, while the news release indicated that the Murray plant would close in fall 2020, a letter the company sent to employees Thursday indicates that all operations in Murray are to be concluded by June 26, 2020, with second-shift workers serving their final shifts on Oct. 25 of this year. Other shifts will be terminated on Jan. 25, 2020. Also, Briggs & Stratton is providing retention pay, ranging from one week’s worth to employees of less than two years to five weeks’ worth for employees of 20 years or more.