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November 16, 2007

Bemis employees frustrated by layoffs

Bemis plans to cut 63 jobs by as early as Sunday

By Arthur E. Foulkes

TERRE HAUTE — Union officials representing Bemis Co. workers expressed frustration Thursday about upcoming layoffs expected at the company’s Terre Haute plant.

“In my opinion …they needed to go after new markets,” said Kirk Smith, president of Unite Here Local 1426, which represents Bemis workers. “They are going to have to come up with a new technology or a new product line or we are in trouble.”

Union officials said Wednesday that 63 jobs were being lost at the Terre Haute Bemis plant, perhaps as early as Sunday. The company has accepted around 70 voluntary layoffs at the Terre Haute plant in recent weeks, according to a company official.

Bemis, which employs more than 1,000 workers in Terre Haute, announced it was planning North American workforce layoffs earlier this fall after disappointing sales numbers in the third quarter of 2007. The company makes plastic packaging film.

The 63 Bemis workers who will be laid off will be those with the least seniority, union officials said. Many of the workers affected by the layoffs have been with the company less than two years, although some affected workers have been at the plant much longer, they said.

Some Bemis employees will also experience downgrades in their jobs and wages due to the layoffs, union officials said.

“We are going to try and help the 63 people” being laid off, Smith said. The union is planning to raise money, collect food baskets and find toys for the workers’ children, Smith said. “That’s our main focus.”

Union officials said the company has failed to make the right decisions to keep the local plant strong. They also complained that free trade agreements, such as NAFTA, have hurt companies such as Bemis. “This is a widespread problem,” said Alan Bryant, service representative and business agent for the union.

Bemis is constantly on the look out for new market opportunities, said Melany Miller, vice president and treasurer of Bemis Co. in Neenah, Wisc. The company’s products have changed greatly in the past five to 10 years, she said.

Bemis is not alone among plastic packaging companies in experiencing hard times right now, said James Early, a senior analyst and advisor with the Motley Fool, a financial services company. Several similar companies are experiencing a tough market right now, he said. The whole industry has “been in the toilet lately.”

One problem for Bemis and other plastic manufacturers stems from higher oil prices. The plastic beads, or resin, used in plastic wrap manufacturing are a petroleum-based product whose price has risen with higher oil prices.

“That hurts the [Terre Haute] area,” union officials said. Terre Haute has a number of companies in the plastics business, they said.

One thing that could help Bemis and other plastics companies in the future is growth in overseas chemical companies, Early said. Chemical plants are springing up in countries with cheaper access to oil, which should bring new competitors into the business of supplying the plastic resin, he said. That is bad news for domestic chemical companies, but good news for companies such as Bemis, he said.

The packaging industry also suffers from “over capacity” right now, Early said.

Union officials believe that the jobs currently being cut at the Terre Haute plant will not be back before the end of 2008. Miller, speaking from the company headquarters, could not comment on that projection.

Bemis Co. has seen its stock price fall from around $34 per share earlier this year to around $27 now. But Early believes the company is financially responsible and calls Bemis stock a bargain at its current price.

Bemis makes some of the industry’s best packaging materials and should benefit from growing demand for high-end packaging in gourmet foods and other food products, Early said. “[Bemis] is probably one of the best in breed,” he said.

The company is also one of the largest plastic film manufacturers, but even as a major player in the industry, Bemis is still small compared to the packaging industry as a whole. This means the company has little ability to pass along higher input prices to consumers, Early said. “Even the big dogs [in the plastic packaging industry] aren’t very big.”

Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.

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