GREENWOOD – In this case, manufacturers heading south is a boon for the Mississippi Delta.
In October, Milwaukee Electric Tool Corp. announced that it was eliminating 130 manufacturing jobs by July 31, 2002, at its Brookfield, Wisc. plant.
The 130 manufacturing jobs are being transferred to a new plant in Greenwood, beginning in January. By the end of 2002, Milwaukee Tool will have a minimum of 200 employees at the new facility.
Company officials said they decided to transfer the work to Mississippi to help bolster the company’s earnings and improve production workflow.
“The restructuring means that we will concentrate most of our manufacturing to the Mississippi-Arkansas area, with Jackson becoming the hub of our southern plants,” Milwaukee Tool CEO Dan Perry.
Established in 1924, Milwaukee Electric Tool is a leading producer and seller of heavy-duty portable electric tools and accessories, including more than 400 tool models of drills, grinders, circular saws, reciprocating saws and rotary hammers.
The company has 545 employees at its Brookfield, Wisc., headquarters and manufacturing plant, and 2,060 employees company wide. Following the job cuts, the number in Brookfield will drop to 415 employees — 70 manufacturing jobs and 345 corporate positions.
Milwaukee Electric Tool is a subsidiary of Stockholm, Sweden-based Atlas Copco Group, an international consortium of industrial companies with more than 26,000 employees. Last year, the group reported sales of about $5 billion.
“Milwaukee Electric Tool has a long history of employment in Mississippi, with our first plant outside of Brookfield opening in Jackson in 1973,” said Perry. “This was followed by a distribution center in Olive Branch in 1979, followed by another manufacturing plant in Kosciusko in 1995. Our experience in Mississippi has been very good. The work ethic and quality of work of our Mississippi employees is excellent.”
With the new plant in Greenwood, the company will have 1,200 employees in Mississippi, said Donnie Brock Sr., chairman of the Greenwood-Leflore-Carroll Economic Development Foundation.
“The cut-and-sew and repetitive type manufacturers are leaving but are being replaced by more technical and better paying ones,” Brock said.
Wages played a big part in the decision to move south. Company spokeswoman Debra Sajkowski said the company would save millions of dollars by moving the work to Mississippi, and the cost of the move would be recovered in savings.
In Brookfield, Wis., the average wage is nearly $20 an hour. In Waukesha County, where the plant is based, the unemployment rate in August was 4.5%. By comparison, the average manufacturing wage in Mississippi was $9.85 an hour in 1998, and the unemployment rate around the time of the announcement was about 10% in Greenwood.
“They’ll be saving nearly $10 an hour here,” said Brock. “That’s a tremendous savings for the company. And there are a lot of people looking for $10 an hour jobs.”
Milwaukee Electric Tool will be leasing a 109,000-square-foot facility formerly occupied by Takata Restraint Systems. Takata closed its Greenwood plant, which manufactured airbags for Toyota, BMW and Audi, in favor of production in Mexico and in the Philippines in December 1999. The closure affected 165 jobs.
“Our foundation acquired the building for $1.7 million and leased it to Milwaukee Tool for 20 years,” Brock said. “The building has only three loading docks so we’re building them six more to better serve their needs.”
Under the GAP program, Milwaukee Tool will receive automatic tax incentives and other city and county incentives. The company will receive job credits through the state, and other “common and routine” tax breaks, Brock said.
“Milwaukee Tool’s reputations as a good corporate citizen shows because they haven’t asked for anything special or further incentives from the taxpayers,” he said. “They’ve already hired quite a few people and are training them in-house.”
Milwaukee Tool will pattern the employee wage scale and benefits after Viking Range Corp. in Greenwood, Brock said.
“They want to be at the top level of attracting employees in the area,” he said.
While a few workers at the Brookfield facility will opt for early retirement, some qualified employees will be offered an opportunity to transfer to the Mississippi Delta. However, relocation expenses will not be paid, said Sajkowski.
Contact MBJ contributing writer Lynne Wilbanks Jeter at email@example.com or (601) 853-3967.