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July 22, 2009

Officials hope Bemis will continue to be productive community partner

By Howard Greninger

TERRE HAUTE — Bemis Co. Inc. has a long history in Terre Haute, one that city and county officials say they hope will continue to be productive despite a strike by union employees that began late Tuesday.

Bemis is a major supplier of flexible packaging and pressure sensitive label materials. Nearly two-thirds of its packaging is used by the food industry, and the remainder by medical, pharmaceutical, chemical and agribusiness.

The company’s Polyethylene Packaging Division plant in Terre Haute began operations in May 1956. It was one of two polyethylene facilities to open that year. The second was in Flemington, N.J.

The original Bemis Terre Haute plant was a 60,000-square-foot facility that employed 80 people, then grew to about 165 employees once operating at full capacity. The Terre Haute plant has been expanded 16 times through 2006.

By 2006, the plant had grown to 850,000 square feet of manufacturing and office space and covers nearly 190 acres, making it the largest plant of its kind in the United States and the largest single plant that Bemis operates worldwide.

Bemis invested more than $21 million in the Terre Haute facility in 2007. The company’s payroll was more than $39.5 million in 2007 with more than 1,000 employees, according to a tax abatement request filed at the Vigo County auditor’s office.

The Terre Haute plant now has about 740 union workers and between 150 and 200 salaried workers. The company had reduced its workforce by about 160 employees since last November; however, some employees have since returned.

The average straight-time pay rate, without benefits, for hourly workers is just under $17 an hour, said Kristi Pavletich, spokeswoman for Bemis. Tuesday’s strike is the first work stoppage at Bemis since the mid-1980s, when workers left work on strike for about three weeks, she said.

Vigo County Councilman Ed Ping is a past president of the Wabash Valley Central Labor Council, and is a current delegate on that labor council as a representative of the United Steelworkers Local No. 7441.

“There has never really been a winner on either side [during a strike] because both sides end up losing. They may gain whatever they are trying to achieve, but in the long run both sides end up losing over a strike,” Ping said.

“It would really be a tremendous effort to get back to the bargaining table and resolve this before the week is over. That way neither side would be harmed very much,” Ping said.

The Steelworkers No. 7441 went on strike in 2003 against Vectren Energy Corp. About 70 workers in Terre Haute were involved in that strike, Ping said. The strike involved 359 workers from the Steelworkers and International Brotherhood of Electrical Workers Local 1393.

Another previous strike in Terre Haute was part of a national strike by 185,000 UPS workers in the Teamsters Union in 1997. The 15-day strike cost UPS about $650 million in lost business, while the union paid about $10 million in strike benefits to members.

Terre Haute City Councilman Norman Loudermilk, whose Third District includes the Bemis facility, said he hopes a resolution can be found quickly.

“I think it is very unfortunate, given today’s economy, that Bemis employees have to take this type of action in order to ensure good working conditions for them and their families,” Loudermilk said. “I would hope that management at Bemis as well as the union can come to some type of terms and agree to a contract. I think it is very unfortunate.”

Loudermilk said last week he was asked by union officials if union workers could park in the city’s firefighting and police training area adjacent to Bemis should the union go on strike.

Loudermilk said he passed the request to the city’s Board of Public Works and Safety. A review by the board’s attorney said the request should be turned down “due to questions concerning indemnification, liability, etc.,” he said.

Loudermilk said he does not think Bemis’ past tax abatements will be affected by the strike. The city will not review tax abatements again until next year, by which time Bemis will likely have settled the strike, he said.

“I don’t want anyone in this community that owns a company and applies for an abatement to have to go through the fear that if their employees strike or take a job action that they will lose their abatement because that is not going to happen. As long as they maintain in compliance with the abatement, I don’t think there is any issue of losing it,” Loudermilk said.

“However, if by their own contract, they admit that they will not be in compliance, then I don’t think any legislative body, whether the city or county, has any alternative but to make them comply, but that would be an entire year away and [Bemis] would have enough time to come into compliance.”

Last year, Bemis celebrated its 150th anniversary with its chairman and chief executive officer ringing the closing bell of the New York Stock Exchange.

The company, which started as Bemis Brothers Bag Co. in 1858 in St. Louis, Mo., as a maker of seamless cotton bags for milled food products, and renamed Bemis Company Inc. in 1965, was first listed on the New York Stock Exchange in 1966 with the ticker symbol BMS.

Bemis this month announced a $1.2 billion agreement to acquire the U.S. food-packing operations of Alcan Packaging, a business unit of Rio Tinto PLC, an Australian mining company. The deal, expected to close by the end of this year, could increase the company’s sales by 40 percent and increase its segment of the global food packaging market to 70 percent from 57 percent, the company said in its announcement.

The Alcan acquisition is to increase Bemis’ workforce by about 30 percent to more than 20,000 employees. The acquisition includes 23 facilities in the United States, Canada, Mexico, Brazil, Argentina and New Zealand. Alcan had sales of $1.5 billion last year, with 4,600 employees. Bemis had $3.8 billion in sales in 2008, employing about 15,800 people, according to the company’s Web site.

Bemis will have 84 manufacturing plants worldwide once the acquisition is closed.

The biggest previous acquisition was in 2005, when Bemis bought South American packager Dixie Toga in a deal valued at about $250 million.



Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com

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