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USA - Hazleton plant closing a 'bad decision'

The former president of Barrett-Haentjens and Weir Hazleton says the closing of the facility after 99 years is a “bad decision” that is going to cost Weir in money and reputation.

Weir announced last month it is closing the Hazleton facility, which manufactures specialty slurry pumps for use in mining, steel and other various markets, in March.

Closing the plant represents an about-face for Peter Haentjens, who said the company was considering an expansion and relocation for a proposed new product just 18 months ago.

Haentjens was the last president of Barrett-Haentjens and continued as president through its ownership by Worman International from 1993-99 and with Weir until 2004. He said only the skilled workforce in Hazleton knows how to make the Hazleton product — vertical pumps of all different types used by the mining and related industries.

“They (the pumps) are fairly specialized, and are engineered to order,” Haentjens said. “There’s a lot of variation to the product because it is designed for specific duties. There are a lot of old designs which have drawings that have to be interpreted because they don’t meet current drawing standards.”

By closing Hazleton and moving production to other facilities, Weir is going to lose the knowledge only Hazleton employees have of the product, Haentjens said.

“They have no succession plan at the management levels to retain the product and engineering knowledge,” Haentjens said. “The people who are making this decision don’t know the Hazleton product line. They don’t know the consequences of the decision they are making.”

Aaron Ravenscroft, regional managing director of Weir Minerals, said the decision to close Hazleton was made after careful consideration.

“The Hazleton facility has been manufacturing industrial equipment for almost a century and the decision to end operations there has been taken with great sadness — but after a very thorough business assessment,” Ravenscroft said. “Recent market conditions have been challenging and Weir Minerals needs to reflect the changing demands of our customers in the way we structure our operations to ensure we maintain efficiency and competitiveness. That is why we took the difficult decision to consolidate manufacturing of Hazleton pumps at our larger facility in Madison, Wisconsin.”

Haentjens said the company was considering the expansion to make a new product for Marcellus Shale gas fracking.

“They were going to develop a product for the gas fracking business,” he said. “They were predicting all kinds of new units. At one point, they were talking to CAN DO about building a new plant a year and a half ago. They’ll say the market changed, and it did change. But they spent $4 million, and got nothing for it. The design team was subsequently moved out of Hazleton.”

Haentjens said closing Hazleton is going to cost Weir millions of dollars and delay delivery of its product, which is going to cost the company in terms of reputation.

“They’re spending money to move this facility somewhere else,” Haentjens said. “They will be spending money in other facilities to accommodate the Hazleton product line. Although the workers in those facilities are skilled and smart, they are not experienced with the Hazleton designs and their product processes don’t fit Hazleton. They might get it right, eventually, but it’s going to take them 18 months, two years, three years. In the meantime, there is going to be a huge disruption within the customer base in Hazleton which, in my opinion, is going to have an impact on Weir in cost and reputation. It is going to cost them several million dollars to make this move, and it’s going to be real a shallow, long learning curve before they get it right.”

Although the move will cost Weir millions, it’s going to cost the 76 people losing the jobs even more because they can do only one thing - make Hazleton pumps.

“Those people have spent most of their life working in this facility who are highly skilled,” he said. “Unfortunately, there are not the kind of jobs that require their skills in Northeastern Pennsylvania. They are not going to find the same pay grade they’re getting right now. Weir is eliminating those people, and they have to replace them with people who don’t know the product line. They have the skills, but they don’t have the knowledge the employee base here has. The people who work in this place are experts at what they do.”

When the closing was announced in November, Ravenscroft said Weir was going to offer some Hazleton employees jobs if they wanted to relocate, and help the rest.

“There is a group of people we hope to relocate and/or retain from the Hazleton site, however we are unable to offer that to all employees,” Ravenscroft said. “For the sake of being respectful to our employees in this difficult time, we do not intend to discuss this in detail. All employees will receive outplacement assistance.”

Haentjens said the people making the decision to close the Hazleton plant don’t understand fully the Hazleton product.

“You’ve got people who are making these high-level decisions who do not have the knowledge base to make an informed decision,” Haentjens said. “All they do is look at numbers, and there is more to it than numbers. There is not a senior manager who has been with Weir for more than a few years. They’ve got no backup plan. They are closing the entire Hazleton operation at one time and hoping it works. They have no timely way to fix the mistakes they are going to make.”

Haentjens said he asked Weir if they would be willing to sell the Hazleton plant outright to another company, perhaps with some type of manufacturing agreement that would maintain the Hazleton skillset and the Hazleton employees.

“They said that’s not something of interest to them,” Haentjens said. “It would be very difficult - impossible - to go outside Weir and replicate the product without access to patterns and drawings.”

Haentjens said he doesn’t know what Weir has in mind for the building on Cedar Street. Weir sold off its foundry in 2003 to Weatherly Castings, which has run Hazleton Castings ever since. Mike Leib, president of both companies, said he may have some interest in at least a part of the Cedar Street facility — which is right next door to Hazleton Castings.

Haentjens and Leib agree the pump industry is in a down cycle now.

“But the down cycle they are in right now has more to do with their plant in Madison,” Haentjens said. “So I think the Hazleton decision is just a sacrifice to take that work and put in Madison or other facilities they have around the country.”

Haentjens said even in a down cycle, the Hazleton plant and its specialized products makes the plant self-sustaining.

“With the amount of staff reduction they’ve already created, Hazleton can continue to maintain itself profitably just as it is right now, with the market the way it is now,” Haentjens said.

“They’ve got the Hazleton Castings foundry 40 feet away, where they get 90 percent of their castings. Instead of being 40 feet away, they will be 1,000 miles away. Not only does their costs go up, their lead time goes up. It’s going to be a hardship, because it makes Hazleton Castings less competitive, too. There are ripple effects in this whole mess.”

Haentjens said the firm could keep the repair facility open to handle repairs on installed pumps.

“It would at least be a backup for the mistakes that are surely going to be made,” he said. “But I understand that is going to be moved to another facility.”

Ravenscroft said although Hazleton is closing, Weir will continue to serve its customers “with highly engineered equipment that is as strong as ever and will be supported by the valuable experience of those Hazleton employees we expect to retain within our business.”

No one in Hazleton - including Haentjens - was consulted on the closing.

“As far as I know, the Weir senior management who made this decision did not consult with any of the former Hazleton management,” he said. “They didn’t consult me. I went after them. If they would have asked any of the former managers, they would have gotten the same answer — this is not going to work, or they didn’t ask them.

“This is a bad decision,” he went on. “There will be no winners, just losers. And once they realize the huge mistake they’ve made, it will be too late. They will have taken a 99-year-old, $40 million-dollar industry and turned it into a $10 million-dollar parts supplier.”

Source: standardspeaker.com

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