By STEVEN NALLEY
On Tuesday, Omnova Solutions announced it has sold production elements of its commercial wall covering business to a New Jersey company, and representatives expect significant job losses at the Omnova plant in Columbus to result.
The Omnova press release containing the announcement says the company has sold equipment, trademarks, contracts and other assets to J. Josephson, Inc., a private wall covering producer based in South Hackensack, N.J. Sandi Noah, communications director with Omnova, said the company has not sold the plant building and site itself, and Omnova’s distribution operations will continue there even after manufacturing has concluded.
“We will continue to manufacture wall coverings for a period of about 12-15 months,” Noah said. “During that time, (J. Josephson, Inc. will) be transitioning some of the smaller portions of the equipment to their plant in New Jersey. At the end of that 12-15 month transition, manufacturing at the plant will conclude.”
Joe Max Higgins, CEO of the Columbus-Lowndes Development LINK, said Omnova’s Columbus operation currently employs 225 people, and the end of manufacturing there will cost Columbus and Lowndes County significant tax dollars.
“I would expect a big chunk of the jobs will be phased out with manufacturing,” Higgins said. “That’s going to have an adverse impact.”
Noah said she had no exact numbers for work force reduction yet.
“The total number of employees that will be (impacted) is likely to be significant,” Noah said. “That will depend on market conditions for our ongoing distribution operations once the manufacturing transition has ended. That will (determine) the size of the force we’ll need in our ongoing distribution operation.
“This was not an easy decision for us,” Noah added. “Omnova has been part of Columbus since 1963, when we first started producing commercial wall coverings there. This is very difficult for all of our Columbus employees since they’re all dedicated, hard-working people who have done their very best to try to make the plant successful.”
Once the manufacturing operation has vacated the facility, Noah said, it remains to be seen how its former space will be used.
“There will continue to be space there that will be a prime location for another manufacturer or (business) to move in,” Noah said. “I would think that another manufacturer could start operations very easily.”
Higgins said Omnova has approached Columbus-Lowndes LINK about marketing the vacated manufacturing space to other manufacturers.
“We have said ‘Yes,’” Higgins said. “(We will recruit a new tenant) just like we recruited $4.4 billion worth of deals in the past eight and a half years.”
Approximately 170 members of United Steelworkers employed by Omnova in Columbus have been on strike since May 2010, but Noah said the long strike did not cause the sale.
“It really has to do with the commercial wall covering market,” Noah said. “Just like residential construction, commercial construction has been very slow over the past several years. We really needed to consolidate, and that’s what prompted the sale.”
In the press release, Kevin McMullen, Omnova Solutions chairman and CEO, also said market issues prompted the sale. He said the sale will enable the company to refocus on its chemical manufacturing business.
“The North American commercial wall-covering market has experienced a prolonged weakness in demand, exacerbated by the multi-year downturn in construction, and is down 50-60 percent from pre-recession highs,” McMullen said. “It was clear that consolidation was necessary for the long-term vitality of the commercial wall-covering industry.”
Higgins said he questioned Omnova’s official stance on the rationale behind the sale.
“I personally believe that the strike had to have had some impact on their decision,” Higgins said. “I do think that the company being on strike and the National Labor Relations Board not being able to give them a ruling had to have had some kind of impact on their decision, maybe not the deciding impact, but some impact.”