Corning adds to Danville's economic woes

The Danville area, which has the state’s highest unemployment rate, suffered another major setback Monday.

Citing the global recession’s continuing impact on all of its businesses and markets, Corning Inc. announced Monday morning it would close the Danville Corning plant after the company decided to discontinue the two product lines produced at the local factory. The move will affect about 200 workers.

“The employees have been informed this morning of this difficult business decision,” Kelli Hopp-Michlosky, company spokesperson, said Monday. “It is a very sad announcement, but there have been a lot of sad announcements worldwide for Corning.”

Last month, the company announced the closing of the plant in Hickory, N.C., which Hopp-Michlosky said served as the optical assembly plant in Corning’s telecommunications business.

She said Danville’s plant closing is part of the global restructuring action that Corning announced at the end of January, which included plans to reduce the company’s global work force by 3,500 workers and consolidate some manufacturing operations.

“The layoffs will be gradual,” Hopp-Michlosky said. “We will begin looking at the process of closing the plant in a phased approach over the coming months. At this point, we are determining how to wind the plant down over time, and we don’t know when it will begin to impact employees.”

The Danville Corning plant opened in 1962 and manufactures a variety of hot-glass products for multiple markets.

The two lines produced in Danville that are being discontinued are VYCOR brand tubing for use in a mercury vapor lighting products, such as automobile applications and Optifocus, which Hopp-Michlosky described as “flexible lens technology used in optical components.”

In 2007, Corning received $150,000 from the Governor’s Opportunity Fund and $300,000 in technology enhancement grants from the city as the company planned to add 50 positions at the plant.

Jeremy Stratton, Danville’s economic development director, said Monday that the city will be-gin in the coming weeks to discuss the process of Corning’s repayment of the monies still owed.

“Corning has been forthcoming in preliminary talks that they want to do what’s right,” Stratton said. “I am confident that there will be a good resolution.”

Hopp-Michlosky said that company officials will be contacting the state and city to begin the process of repayment and will “immediately and fully honor the terms of the agreement.”

Union workers at Corning belong to the United Steelworkers Local 1014 after the American Flint Glass Workers Union merged with the USW several years ago.

Rickie Pike, staff representative for the local union, had just been notified about the plant clo-sure when contacted Monday afternoon.

“We (union members) have a contract in place with certain provisions, and the company has an obligation to do effects bargaining,” Pike said. “(The closing) is just unfortunate. We will do every-thing we can on behalf of our members.”

Hopp-Michlosky said that the company will be talking with the union to discuss “severance and benefits options” as well as opportunities to transfer to other Corning plants.

“Negotiations are under way,” she said, “and we will probably be meeting with the union by mid-year.”

The plant closest to Danville is in Christiansburg, and it has not been affected by Corning’s re-structuring, Hopp-Michlosky said.

Corning Inc. had revenues of $5.86 billion in 2007 and $5.9 billion in 2008.

“The first half of 2008 was very strong, very solid,” the company spokesperson said. “But during the back half of the year, business fell off, and we saw a significant drop in orders and sales.

“The company is currently structuring around the anticipation that it will be doing $5 billion in revenues in 2009.”

The news of Corning’s closure follows last month’s agreement between Goodyear Tire & Rubber Co. and United Steelworkers Local 831 to put the Danville plant on eight-hour work shifts, five days a week, and offer 200 buyouts to qualified employees.

More than 400 workers are expected to lose their jobs between buyouts and layoffs. The plant’s workers are on furlough this week with the first round of layoffs scheduled to be effective this week as well.