Medical device manufacturer DJO Chattanooga, which has operated for more than 60 years and long was known as Chattanooga Group, plans to shut its Hixson plant and cut more than 300 jobs.
The plant closure will take place over the next nine to 12 months, said Mark Francois, a spokesman for the San Diego-based company's owner, DJO.
"It's a tough decision to make," he said about the Adams Road facility. "It's all about streamlining and cutting costs."
Manufacturing will close down gradually over the period, and customer service and distribution will be the last to go, Mr. Francois said. Manufacturing will be moved to DJO's operations in Mexico, he said, while customer service will be moved to Vista, Calif., and distribution will shift to Indianapolis.
DJO workers were told Tuesday about the closing. A couple of employees in a near-empty parking lot at the facility Tuesday afternoon declined comment.
Acquired in a 2007 merger, DJO Chattanooga fell victim to the ongoing integration of its parent company's operations.
DJO Chattanooga earlier this year won the Kruesi Award for innovation from the Chattanooga Area Chamber of Commerce.
Ray Childers, the Chattanooga Manufacturers Association president, said it hurts when a longtime company winds down.
"We feel for the employees who lose their jobs and hope our economic development people can find a suitable use for the facility and bring more manufacturing," he said.
Mr. Francois said DJO Chattanooga's Hixson plant probably will be put up for sale. All employees will be offered severance packages and can apply for positions within the company if they're willing to relocate.
"It's a terrible thing when you have to close a facility," he said.
J.Ed. Marston, the Chamber's vice president for marketing, said news about DJO Chattanooga is "a serious loss" to the local economy.
"This is the reason we're working hard to retain and recruit new jobs," he said, citing Alstom and Volkswagen, which are coming on line.
For many years, Chattanooga Group was owned mostly by the McNeil Trust and, at one time, employed more than 400 people.
In early 2002, it was bought by Texas-based Encore Medical Corp. In 2007, Encore - later called ReAble Therapeutics - was bought by private equity firm The Blackstone Group.
Manufacturing companies in the Chattanooga area have been hit this year during the recession.
This spring, R.L Stowe Mills shut down its Chattanooga yarn mill, putting 350 people in the area out of work.
Nearly 300 workers at the Pilgrim's Pride poultry processing plant in Dalton, Ga., are looking for work after the company announced the shutdown of that facility.
Shaw Industries, Georgia's largest manufacturing employer, said this year that weak demand and a soft housing market forced the company to close its spun-yarn facility in Calhoun, Ga., affecting about 400 employees.
In Dunlap, Tenn., Seymour Tubing Inc. will shut down this summer, idling 86 employees who produced tubing for automobiles.