(St. Joseph News Press) – WireCo WorldGroup will close the majority of its St. Joseph manufacturing operations in a move that will leave the company with its smallest local workforce in nearly 70 years of doing business here.
The company will eliminate 49 jobs in St. Joseph.
“I feel bad for friends I know there in their 50s that were striving to earn their retirement,” said Rick Evans, who left WireCo in 2004 to become a registered nurse. “My dad started working there in 1965, and he got to retire, so it’s sad to know other workers won’t.”
WireCo President and CEO Chris Ayers announced the closing in a conference call with investors Thursday. Employee and union sources say company executives appeared in St. Joseph to deliver the news Thursday morning.
“We will be closing the facility over the next 12 months,” Ayers said in the investor call. “While we hate to make a decision that affects our employees in that way, it was time to consolidate.”
Ayers said equipment would be relocated to other WireCo facilities, but about 14 employees will remain at a fabricated products division on Main Street.
Later Thursday, Hillyard Industries of St. Joseph announced plans to purchase about 25 acres of WireCo’s Downtown property and redevelop it into a new manufacturing and national distribution center. Hillyard makes cleaning and hygiene products.
“Wire Rope made the decision to close the facility here, but on the other hand you have a local company here with ties to the community that’s going to use that as an opportunity to grow and to get stronger,” said R. Patt Lilly, president and CEO of St. Joseph Chamber of Commerce.
Once known as Wire Rope Corporation of America, the company became one of the largest employers in St. Joseph after relocating from New Haven, Connecticut, in 1948. Wire Rope’s work force surged to 1,500 in its heyday, but cheaper foreign competition began to take its toll beginning in the 1980s.
To those who worked at WireCo or know someone who did, this closure doesn’t come as a big surprise.
“The rumor has been going around this town for 30 years that Wire Rope was going to close,” Evans, former WireCo employee, said.
In 1999, union employees went on strike for a month in St. Joseph. Wire Rope lost $26 million in 2001 and filed for bankruptcy protection one year later.
The company emerged from bankruptcy with a new name — WireCo WorldGroup — new private equity ownership and plans for growth. WireCo moved its corporate headquarters from St. Joseph to north Kansas City but maintained production operations in St. Joseph, Chillicothe and Sedalia.
It expanded its operations with a series of acquisitions and joint business ventures in Mexico, China, Canada, Portugal, Poland, India and the Netherlands. The company now operates 24 manufacturing facilities in eight countries.
Falling oil prices hit WireCo hard in recent years, with net sales plummeting $172 million in 2015 while adjusted earnings dropped 18 percent on a year-over-year basis. The company’s wire rope products are used in energy exploration, bridge construction, industrial fishing, mining and other industries that can experience cyclical downturns.
Ayers announced $18.3 million in expense reductions last year and said the company would “continue to work the costs.”
WireCo has been slowly working its way to closing the St. Joseph site. In September 2013, 21 employees were let go, and one year ago 30 more St. Joseph employees were laid off.
The company is now headquartered in Prairie Village, Kansas. The closing of the St. Joseph facility will not impact operations in Chillicothe or other Missouri sites.
Lilly said employees who are being let go have valuable skill sets to offer other employers in the area.
“We have companies today that are hiring and can’t find people to hire,” Lilly said. “I think people who work at (WireCo) that have experience and skills will be able find work here in the area. Our unemployment rate right now is lower than it’s been in many years.”
WireCo will provide the 49 employees affected by the decision transitional assistance as they start their search for new jobs.