Tuscaloosa packaging plant to close

2/17/2009

By Dan Carsen

Graphic Packaging International recently announced plans to close its food packaging plant in Tuscaloosa, Ala., by the end of the second quarter of this year. About 90 people will lose their jobs when the facility, which produces folding cartons, closes its doors in June.

“We are continuing to push aggressively in 2009 to integrate assets and streamline operations," says David W. Scheible, president and chief executive officer. "We intend to compete as the lowest-cost producer in our markets.”

            The corporation – a subsidiary of Graphic Packaging Holding Co. of Marietta, Ga. – also plans to shut down a bag-making plant in Cantonment, Fla., by the end of the third quarter. Carton plants in Morris, Ill., and Muncie, Ind., are scheduled to close then, too. The company has already laid off 60 employees at a carton plant in Elk Grove Village, Ill.

            The streamlining measures, originally intended to cut some $90 million in costs by 2010, were planned when the company merged with Altivity Packaging in March of 2008. That was before the economy went into deep recession, and before the parent company was notified this Feb. 6 that its stock price was “below criteria” according to New York Stock Exchange regulations.

The 30-day average common stock price had dipped below the one-dollar listing standard to $0.98 per share. That figure has dipped even lower recently. Scheible said, however, that stock prices are not reliable indicators of the company’s “strong financial and operating position.” Executives point out that the stock prices of many firms have fallen, and that Graphic Packaging is ahead of schedule in achieving the $90 million in “synergy savings.” They predict stock value will increase as a result. 

Another Graphic Packaging facility in Tuscaloosa – a lamination plant that employs about 80 people – will continue to operate as usual, a spokesperson said. Both plants are in Tuscaloosa’s Airport Industrial Park.

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