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Posted: Friday, October 5, 2012 9:42 am

OLEAN — After nearly a century, the tile manufacturing plant in east Olean will close its doors for good early next year.

Late Thursday afternoon, Dal-Tile International Inc. officials announced their facility on South Clark Street will shut down permanently by the end of January, leaving its 174 employees without jobs.

“Though made with careful consideration, declining demand for this type of tile and our excess production capacity necessitated our decision to close the Olean facility,” said John Turner, Jr., president of Dal-Tile, in a statement released to the Times Herald. “It was an extremely difficult decision, given our employees and history at the site.”

The decision to close the local plant comes after corporate officials completed an evaluation of the local plant and a sister facility in Gettysburg, Pa., for cost effectiveness and long-term viability. The facilities are Dal-Tile’s only manufacturers of mosaic tile.

Tile production operations at the Olean plant will be moved to the Gettysburg plant, where company officials expect to add 64 jobs. The Gettysburg facility currently employs 185.

“Our manufacturing operations at Gettysburg provide the capacity, flexibility and cost effectiveness that we require to meet customer needs,” Mr. Turner said.  

Jarrett Steele, a Dal-Tile spokesman, said the decision to close Olean’s facility was not influenced by the plant being the corporation’s only unionized shop.

“This decision strictly had to do with our production capabilities and the flexibility we need to meet our customer needs,” Mr. Steele said.

He noted the consolidation of company resources will not impact customers.

In the coming weeks, Dal-Tile corporate officials are expecting to meet with officials from the United Steelworkers Olean Local 1515G, which represents those working at the Olean facility, to negotiate potential severance packages and discuss the procedure for the plant’s closure.

Mr. Steele said, as of Thursday, the plant will not be closed in phases, but rather all at once.

Initial news of the evaluation of the Olean and Gettysburg plants prompted several area elected officials to take action to keep the local facility open.

In August, U.S. Sen. Charles Schumer, D-N.Y., called Mr. Turner and implored him to keep the Olean plant from shutting down.

Sen. Schumer and U.S. Sen. Kirsten Gillibrand, D-N.Y., as well as state Sen. Catharine Young, R-Olean, state Assemblyman Joe Giglio, R-Gowanda, and officials with the Cattaraugus County Industrial Development Agency also began discussions with the Empire State Development Corp. (ESD) to put together an incentive package for Dal-Tile to keep Olean’s plant open.

That package, which was recently offered to Dal-Tile, included tax breaks, access to low-cost power allocations and low-interest loans, but it was simply not enough to keep the Olean plant open.

“The ESD, U.S. senators Schumer and Gillibrand, state Sen. Young, and agencies across the state of New York were very aggressive in their efforts to get as many sources and incentives as possible; we believe that they did all that they could,” Mr. Turner said. “Their dedication to providing Dal-Tile with an extremely comprehensive proposal in a very timely manner was very much appreciated so that we could have the information needed to finalize the assessment and make a decision.”

Exact details of the incentives offered are not being released, though, in a press release, Sen. Young said that keeping open the Olean plant  “would have cost Dal-Tile $10 million more in capital and operations” than at the Gettysburg plant.

“This outcome is very disappointing and heartbreaking,” Sen. Young said of the Olean plant’s closure. “All levels of government worked together to put forward an aggressive, lucrative package to keep Dal-Tile here, going above and beyond the state’s usual economic development incentives.”

“I’m very disappointed that the Dal-Tile facility in Olean will be closed,” Rep. Giglio said. “The downturn in the economy forced the company to make a very difficult decision. Unfortunately, the company felt that it was unable to make the necessary investments in the Olean facility to keep it operational.”

According to the city’s Office of Assessment and Taxation, Dal-Tile’s local manufacturing and storage facilities are assessed at a combined value of $2,113,000 and would contribute $30,617 to this year’s city property tax revenues and $26,539 to county tax revenue. The Olean City School District tax bill this year for the facilities adds up to a combined total of $50,573.

Each month, the plant’s tile operation used between $6,000 and $7,000 worth of water, according to city Water Department officials.

Information on what the company pays in state taxes was not immediately available to the Times Herald.

Employees at both the Olean and Gettysburg plants were notified of Olean’s upcoming shutdown Thursday morning.

“I worked at Dal-Tile for about five years,” said an Olean employee who asked not to be named. “This affects not just the employees but their families, the vendors that bring stuff in, the people we sell to and just about everybody.”

The employee said news of the closure was not entirely unexpected, but, “Everyone was crossing their fingers, hoping that it wouldn’t (close).”

Outside the plant around 3 p.m., employees could been seen going in and out of the building between shifts. Employees declined to talk on the record but expressed disbelief and anger over the announcement. Many longtime employees said they were saddened by the decision, saying that the workers had become like a family, while one employee said that her coworkers were strong and would find a way to move on.

Mayor Linda Witte and Ann McLaughlin, D-Ward 2, were both notified of the plant’s future Thursday morning during a conference call with Dal-Tile and other area elected officials.

“We just didn’t win this battle, but it was hard fought by everyone,” Mayor Witte said. “Everyone did their due diligence, and we are all very sad today. It’s devastating for our community — there are people that worked there their whole life.”

“Everyone — city, state and (federal) officials — came to the table to fight for Dal-Tile. It didn’t matter if you were a Republican or Democrat,” Mrs. McLaughlin said of the efforts to save the facility in her ward.  “Our hearts are heavy today.”

The local Dal-Tile plant’s history dates back to 1912, when Charles T. Fuller, a gas light manufacturer, teamed up with O.W. Pierce, a metal craftsman, to begin making glazed clay products. Later that year, the pair hired Gordon D. Phillips, a student at Alfred University, to join their venture, forming Olean Tile Co.

By April 1914, Olean Tile began the actual formation of tile in a small shop located where Dal-Tile currently stands. Toward the end of 1915, the plant’s 11 workers produced its full kiln of properly fired tile.

Throughout the next century, Olean Tile experienced periods of growth, merged with other tile companies and changed names several times. At one time, the local plant employed as many as 400 workers.

Locally, tile produced at the plant can be found in many area buildings and facilities, including the city’s Municipal Building, St. Bonaventure University, East View Elementary School and Olean General Hospital. The facility’s tile can also be found in the White House, as it was used in 1951 during a renovation of the 24 bathrooms at the presidential residence.

In 1995, Olean Tile announced it would merge with Dal-Tile, owned by Georgia-based Mohawk Industries, Inc., to form Dal-Tile International, Inc. The deal was completed in 2002.

In more recent decades, the local plant experienced periods of decline as the domestic tile industry competed with a lower demand for tile products and foreign tile companies began to dominate the market.

In 2005, Dal-Tile officials were considering closing one of the company’s three mosaic tile plants in the U.S. after its expansion of a mosaic tile manufacturing operation in Mexico. In December 2006, Dal-Tile officials opted to close the company’s mosaic tile plant in Jackson, Tenn.

With the plant’s looming shutdown, area elected officials say they will continue to work on behalf of the 174 employees to help them move forward with their lives.

“We have offered our assistance to the employees to open whatever lines of communication we can to help the employees and their families,” Mrs. McLaughlin said.

“I have already been in contact with the Department of Labor, and they have readied their Rapid Response Services team to come to Olean and help the workers with new job placements, unemployment insurance and additional job training,” Sen. Young said. “Also, I will continue to work with Empire State Development, the Cattaraugus County Industrial Development Agency and local officials to find a new business to take over the Dal-Tile facility and bring good jobs back to Olean.”

Rep. Giglio echoed Sen. Young.

“I pledge my assistance to the affected employees with unemployment, training, continuing education and job placements,” he said. “I’m hopeful that the parties are able to work together in recruiting a new business to the facility and the community.”

Editor Brian Lothridge contributed to this story.

(Contact reporter Christopher Michel at cmichel@oleantimesherald.com. Follow him on Twitter, OTHChris.)

  • Discuss

Welcome to the discussion.

5 comments:

  • Mason HAMILTON posted at 11:59 am on Thu, Oct 11, 2012.

    theshack66 Posts: 0

    It's too bad that a president has been talking about ending this recession when really we;re being driven further and further into it. The pland shutdown is not something that can be dealt with on an easy level. But one thing that the employees can do is know that no matter what happens, they will always have each other to balance the good and bad aspects of this decision. It wasn't the employees fault that the company chose to shut down the olean plant. They worked so many long hours to accomplish what only one company could do. Had it not been for the hard work and effort of those who sacrificed their time and effort to keep the company afloat, they would not have the knowledge to carry on into a new job. You did your best, worked your hardest, and never gave up. Don't let the company win this battle. Keep giving it your all and keep every one of your fellow employees in mind. When it comes time to walk out those doors, don't look back and fret over it. Think of the closing as a new beginning to an old end. Best of luck to you all.
    - Son of a Dal Tile employee

     
  • Joe PREVITE posted at 5:26 pm on Tue, Oct 9, 2012.

    Daveyboy069 Posts: 7

    Sam is right about the costs in New York State to operate a business. This affects everyone in the area, the restaurants, the food stores, the mall, etc. With this many people being out of work, they will save their money and not spend on anything but the necessities in life. Also, you will see a number of homes going up for sale as these people realize there is no future in Olean for them or their families. This leads to abandonment of property which makes neighborhoods eyesores for everyone.

    The population of Olean has been declining 6-7% yearly and this will add to it with people leaving for greener pastures. This could be the start of a severe downturn in the US economy since the Bush tax cuts of 2001 expire in January of 2013 which will cause a recession. Whomever gets elected President will have to deal with it immediately after being sworn in. If you have a job, feel lucky that you do because there will be tremendous competition for even the most basic employment in Olean with this announcement.

     
  • Sam1971 posted at 9:54 am on Tue, Oct 9, 2012.

    Sam1971 Posts: 0

    I am sure it was an easy choice of which division to close. With property taxes the way they are here that alone makes the choice easy. Then add on New York's workman's comp rate, employment/payroll tax rate and all the other eco fee's this state adds. The people in charge have no issues with wasting millions fixing schools that get shuttered the very next school year instead of offering discounts and incentives to stay in the area. I own a small manufacturing business and all the work I do is done in New Mexico where it's so much cheaper and I don't mean labor costs. Labor is about the same if not a bit higher then Catt County area but the operation costs based upon employees is about 45% cheaper. To those in charge it should be simple, cut the taxes to business in Olean so that companies actually come here and not to Allegany like Home Depot, Wal-Mart and so many more because they offer favorable operation tax rates. Now Allegany gets the tax revenue from Olean residents and Olean gets nothing.
    Now this tile company is closing it's doors and moving the work to another state. 170+ people out of work and the jobs are to come from where? What new companies are coming here? Well another 170 families going welfare, food stamps and unemployment. Way to go Olean operators, way to go Oh and I won't forget the state of New York too!

     
  • R H posted at 3:50 pm on Sat, Oct 6, 2012.

    cgarme Posts: 0

    Doesn't anyone see that many business in New York have left because of the cost associated with NY?
    Keep on voting the same old way here with NO vision for the future and we will all be living in a slum state with no jobs or growth for your children. The last on to leave New York Please turn out the lights.

     
  • James CONNOR posted at 7:42 am on Sat, Oct 6, 2012.

    Button347 Posts: 0

    I lost my job with Rochester Button Company in Wellsville, New York back in 1980 and at that time
    the Federal Government had a program called TRA (Trade Readjustment Act) where by the Federal
    Government added to the State Unemployment Benefit. This adjustment was given to workers who
    lost their employment due to foreign competition. It came in handy for the workers and I am wondering
    if it is still in effect. Guess you can say the workers at the tile company are in the same boat we were.
    Foreign competition.
    Jim Connor