Archive for Saturday, April 12, 2003

Firms forced to improve efficiency

April 12, 2003


Lawrence-area business leaders spent much of 2002 trying to keep up with who was leaving town, but they began to see signs of a turnaround as the year drew to a close.

Two major employers, Sprint PCS and Davol Inc., announced in 2002 they were closing their Lawrence facilities and would eliminate more than 600 jobs in the process.

Both closings were a clear sign that Lawrence employers had gotten caught up in the larger national economic downturn that forced firms to improve efficiency or suffer the consequences. Lawrence's Sprint PCS customer service center was one of five the Overland Park-based company closed. The move was expected to save the struggling wireless telephone company $60 million a year.

Lawrence's Davol plant was one of three the medical device manufacturer slated for closure in a restructuring move expected to save $20 million a year.

Sprint PCS in June closed its customer service center in the former riverfront mall. The closing was the biggest job loss of the year for the Lawrence economy, with 500 jobs eliminated. No tenant has been found yet to occupy the nearly 84,000 square feet that is available in the former mall building.

Davol announced in August that it would close its manufacturing plant at 700 E. 22nd St. The closing, slated for this spring, will cost the community 130 jobs.

Chamber changes

Area business leaders also watched two of the Lawrence Chamber of Commerce's top executives leave their jobs in 2002.

Debi Moore, the chamber's vice president of economic development, resigned her position in February 2002. She was replaced by Lynn Parman, who came to Lawrence after filling a similar position in St. Joseph, Mo.

In October, chamber president and chief executive Bill Sepic announced he was leaving to take a similar position with the Lansing, Mich., Regional Chamber of Commerce. Retired Douglas County banker Jean Milstead was named the chamber's interim president and CEO.

During the last two months of the year, the focus began to turn to who is coming to town rather than leaving. In November, NCS Pearson announced a 45,000-square-foot expansion at its East Hills Business Park facility. The project will add 150 call center jobs to meet several new government contracts the company has won.

In December, Serologicals Corp., an Atlanta-based life sciences firm, announced it had chosen Lawrence for a new $28 million manufacturing facility in the East Hills Business Park. The new plant will have 40 employees with an average salary of $47,000 a year. The company will make a key ingredient used by several pharmaceutical companies in the production of drugs that treat certain types of cancer, arthritis and childhood illnesses.

Community changes

Here's a look at other major events in the Lawrence business community in 2002:

  • Farmland's future: Farmland Industries made it clear in 2002 that its approximately 500-acre fertilizer plant along Kansas Highway 10 would not reopen. After the plant laid off nearly all of its 100 employee work force in 2001, the company in September announced it would sell its Lawrence plant and six others as it tried to emerge from bankruptcy.

In January of this year, the company announced it had reached a deal with a subsidiary of Wichita's Koch Industries to buy its fertilizer plants, but the deal did not include the Lawrence facility. The Wichita company said it wasn't interested in the Lawrence plant primarily because of its age, which is more than 50 years old and is the oldest plant in the system.

Area economic development officials said that meant the 600-acre plant was a likely candidate to be redeveloped for other industrial uses, but a buyer has not stepped forward.

  • Fore!: Area officials are keeping an eye on the Lawrence-based Golf Course Superintendents Association of America. The company announced in late 2002 that it was considering moving to Phoenix, Orlando, Fla., or Jacksonville, Fla., to be closer to other major golf organizations. Lawrence economic development officials are considering what they can do to convince the company to remain in town. The firm employs 120 people and pays an average wage of nearly $43,000.

In February, association officials promised to put off any vote to move the association for at least year but said they still would be considering offers from the Florida communities.

  • Kmart concerns: Lawrence's Kmart store survived 2002 but it didn't survive 2003. The store wasn't included in the company's first round of closings after it declared bankruptcy in January of 2002. But one year later, the company announced the Lawrence store at 31st and Iowa streets would be closed early this year. The closing eliminated approximately 80 jobs.

Economic development leaders did breathe a sigh of relief that Lawrence's Kmart distribution facility, which employs about 450 people, was not included in the closings. The company did close one distribution center in Texas but has not announced plans for any future changes to its distribution system.

  • Packerware purchased: Lawrence's Packerware Corp. gained a new owner in 2002. Berry Plastics, the parent company of the Lawrence manufacturer of plastic cups and houseware items, was purchased by a division of the investment banking giant Goldman Sachs & Co. The new ownership, thus far, has produced positive results for the Lawrence facility. The plant added 22 jobs in late 2002 after work from other Berry facilities was transferred to Lawrence.
  • Prosoco progress: Lawrence-based Prosoco announced plans for a 53,000-square-foot addition to the its corporate headquarters in the East Hills Business Park. The expansion initially will add eight to 10 jobs at the company, which currently employs 80 people. But the new project, which is under construction, will give the manufacturer of stone and masonry cleaning supplies the ability to add a second production shift, which could result in 50 new jobs in the future.
  • Hallmark happenings: Lawrence's Hallmark Cards production plant benefited from the company's decision to close its downtown Kansas City, Mo., facility. About 40 employees from the Kansas City plant were transferred to the Lawrence facility, which also was named the company's primary producer for the popular Shoebox Greeting card line.
  • Chamber campaign: Lawrence Chamber of Commerce officials launched a private fund-raising drive in an effort to raise approximately $1.5 million to enhance the community's economic development program. Incoming chamber chairman Larry McElwain said the campaign had collected about $850,000 in pledges and another $250,000 of in-kind contributions thus far.
  • A Forbes find: In May, Lawrence was ranked the ninth-best small metro area in the country for business and careers by the publishers of Forbes magazine. The magazine cited the city's growth in employment numbers and an emerging high-tech industry.

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