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The facility makes parts for automobiles.
Thursday, September 5, 2013
Grede will shut down its foundry in Radford later this year, a decision that will cost the city 250 jobs and could send an economic ripple throughout the New River Valley.
The facility makes steel parts for the automotive industry, but has been limping along since the economy turned sour. The foundry — a presence in west Radford for decades — has been closed twice and changed ownership three times since its previous operator, Intermet, went into bankruptcy in 2008.
On Tuesday, its most recent owner began telling 28 salaried employees they would be let go when production stops in December. Some of those employees will have an opportunity to apply for similar positions at one of Grede’s 16 other facilities.
The remaining 234 hourly workers found out Wednesday they too would lose their jobs, but likely will not have the same opportunity to move elsewhere, a company official said.
The salaried employees will be offered severance pay and the hourly workers some extra money if they agree to work up until the plant stops production.
The plant isn’t officially “closing” but rather “being idled.” That means Grede will still own and manage the property. It could come back online if the economy improves, although the company has no concrete plans for that .
“Essentially, it was a lack of competitive cost structure within the plant,” said Grede spokesman Richard Pacini, later adding that “we completely understand the emotion involved in this, but, again, it was one of these business decisions that had to happen.”
This kind of closing is expected to hurt more than just the families of those who work at the plant. Radford Economic Development Director Basil Edwards said the plant provides business to suppliers throughout the New River Valley and many of its workers live outside the city.
“It will affect the whole valley, not just Radford,” he said.
Things started going downhill when Intermet declared bankruptcy and laid off the plant’s entire work force in August 2008.
The facility sat idle for two years until Virginia Casting Industries purchased it in 2010. VCI promised to invest $9.1 million and hire 300 employees to get things back up and running.
But by the time it was sold to Grede in March 2012, the facility employed just 170 people, according to a news release from that date.
The Michigan-based company signed on with big plans to take on new business and hire 100 additional workers. B efore the ink could dry, the foundry suffered a furnace fire that May. No one was hurt, but the accident shut down production and made it difficult for the facility to generate the kind of revenue the company was looking for.
“That industry is very, very competitive,” Edwards said. “It’s just a very expensive operation. The margins are very thin. It’s a very competitive business; we understand that. That’s what led to the third operator there in the last six years.”
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