Ceramic tile-maker Dal-Tile Corp. is closing its mosaic tile manufacturing facility in Olean because of the weak economy and sluggish sales, laying off 174 workers after last-ditch pleas by politicians and efforts by state economic development officials to save the plant failed to sway the company.
The Dallas-based manufacturer, the largest U.S. maker of ceramic tile and natural stone, will shut down its plant at 130 South Clark St. by the end of January after concluding that it made more sense to consolidate operations at another plant in Gettysburg, Pa. The Olean plant is the company’s only facility with its own machine shop, but it’s also the only unionized plant.
The company said it had completed a “comprehensive assessment” of its unglazed mosaic tile business, and the consolidation and expansion at Gettysburg “brings production capabilities in line with the decline” in demand for that business. It plans to add 64 jobs in Gettysburg, where it now employs 185.
“Though made with careful consideration, declining demand for this type of tile and our excess production capacity necessitated our decision to close the Olean facility,” John Turner Jr., president of Dal-Tile, said in a statement Thursday afternoon. “It was an extremely difficult decision given our employees and history at the site.”
He added that the consolidation will not affect customers or product availability.
“Our manufacturing operations at Gettysburg provide the capacity, flexibility and cost effectiveness that we require to meet customer needs,” he said.
State Sen. Catharine M. Young, R-Olean, one of several politicians who lobbied the company to keep the facility open, said product sales for Dal-Tile are “way down,” and the plant was operating at just 40 percent to 50 percent of capacity.
As a result, even with state and local assistance that was offered, it would have cost the company $10 million more “in capital and operations” to stay in Olean, compared with the other mosaic tile plant in Gettysburg.
“This outcome is very disappointing and heartbreaking,” Young said in a statement. “All levels of government worked together to put forward an aggressive, lucrative package to keep Dal-Tile here, going above and beyond the state’s usual economic development incentives. In the end, the severe downturn in the national economy was too much to overcome.”
Employees at both facilities have been notified, along with United Steelworkers Olean Local 151G, which represents some employees in Olean and is now negotiating with the company. Dal-Tile also said it will work with the state Labor Department to provide assistance to affected workers, and Young said the state’s Rapid Response Services team will come to Olean to help with job placements, unemployment insurance and other job training.
“I’m very disappointed that the Dal-Tile facility in Olean will be closed,” Assemblyman Joseph M. Giglio, R-Gowanda, said in the joint statement with Young. “The downturn in the economy forced the company to make a very difficult decision ... Unfortunately, the company felt that it was unable to make the necessary investments in the Olean facility to keep it operational.”
Both Young and Giglio said they will work with state and local officials to recruit a new business and new jobs to the facility.
Founded in 1947, Dal-Tile operates nine manufacturing plants and four distribution facilities in the United States, Canada and Mexico, with about 7,500 employees. The company, which makes glazed wall and floor tiles, unglazed floor tiles, porcelain tiles, ceramic mosaics, stone products and insulation materials, sells under the Dal-Tile and American Olean brands through 250 of its own sales service centers, independent distributors and home center retailers.
The company was acquired in 2002 by Mohawk Industries of Calhoun, Ga., a publicly traded supplier of flooring – including carpet, ceramic tiles, laminate, wood, stone, vinyl and rugs – for residential and commercial use.
Empire State Development Corp. worked with Cattaraugus County Economic Development, the Cattaraugus County Industrial Development Agency and the City of Olean to craft a package of incentives to prod the company to reconsider the closure. The proposal, which would have made it easier to invest in and grow the Olean facility, included grants, tax credits, loans and other forms of financial assistance, such as energy efficiency and utility incentives from New York State Electric & Gas, the New York Power Authority and the New York State Energy Research and Development Authority.
In recent months, the company also was lobbied by Young, Giglio, and U.S. Sens. Charles E. Schumer and Kirsten Gillibrand.
But it was not enough, said Turner, who added that they were “very aggressive in their efforts to get as many sources and incentives as possible.”
“We believe that they did all that they could,” he said. “Their dedication to providing Dal-Tile with an extremely comprehensive proposal in an very timely manner was very much appreciated, so that we could have the information needed to finalize the assessment and make a decision.”