One of Bradley County's biggest manufacturing employers plans to shut down its pharmaceutical plant in Cleveland, Tennessee next year and outsource the production of its Coppertone and other skincare products currently made entirely in Cleveland.
Beiersdorf Inc., a Hamburg, Germany-based maker of personal-care products that acquired the Cleveland plant two years ago with its purchase of the Coppertone brand, said it is phasing down production at its 423,535-square-foot plant on Michigan Avenue and will cease production by the summer of 2022.
The 43-year-old plant, which was previously operated by Bayer Healthcare, Schering-Plough and Merck, employed 458 employees prior to the pandemic and was the seventh biggest private employer in Bradley County, according to the Cleveland-Bradley County Economic Development Council.
Alvaro Alonso, general manager of Beiersdorf North America, said Beiersdorf completed a review of the Cleveland facility last month and concluded it would be more cost effective to outsource production of the Coppertone and other skin care products in the United States than to continue to make such products at the Cleveland plant.
"Our thorough analysis showed clearly that the costs to retrofit the Cleveland facility to the infrastructure, processing and logistics requirements of other Beiersdorf products were simply too high," Alonso said in a statement to employees last week.
Despite the planned shutdown of its production site in Cleveland, Beiersdorf said the majority of Coppertone production will remain in the United States with third-party manufacturers. The corporate management, marketing, research and product development for the Coppertone brand also will remain in the United States, although that work may be shifted to Beiersdorf's North American headquarters in Connecticut.
"We did not arrive at this decision lightly and wish it could be otherwise," Alonso said. "The plant closure is not a reflection on the hard work and dedication our Cleveland colleagues have shown since they joined the Beiersdorf family in 2019. If this were only about the excellence of our people, we would remain in Cleveland."
Beiersdorf had already begun to downsize its staff, filing a WARN notice with the state last month indicating it would lay off 134 employees by Sept. 29, 2021.
The company said it will work with the displaced workers over the next 16 months to help them find other jobs and Beiersdorf said its support for those being laid off will also include a comprehensive severance package.
"Beiersdorf remains committed to providing a smooth transition and unwavering support throughout the year-plus process that remains before us," Alonso said.
Beiersdorf paid $35.2 million to buy the plant and its 59.8-acre site at 4207 Michigan Avenue in Cleveland from Bayer Healthcare in 2019, according to Bradley County property records.
Beiersdorf acquired the plant as part of its acquisition of Coppertone, which at the time Beiersdorf CEO Stefan De Loecker said would help Beiersdorf gain access to the world's largest sun protection market in the United States and "enable us to significantly accelerate our growth." After its purchase, Alonzo said the company began an extensive 18-month study of the production needs and alternatives for Coppertone and other skin products to determine what supply chains were most effective.
Doug Berry, vice president of economic development at the Cleveland/Bradley County Chamber of Commerce, said Beiersdorf had not requested any local government assistance to maintain production or make what the company said were needed upgrades for its manufacturing operations in Cleveland.
"These are good-paying jobs and this is disappointing and heartbreaking on many fronts," Berry said. "The good news is that Bayer (the previous owner of the plant) was making active investments in 2017, the last time we worked with them, and that was about a $25 million modernization for GMP (good manufacturing practices) for these pharmaceuticals in the consumer health products industry."
Since it was originally built in 1978, the Michigan Avenue plant has been revamped and expanded and produced everything from Dr. Scholl's footwear to Claritan tablets and MiraLAX laxatives, in addition to the Coppertone and other skincare products made and assembled at the facility today.
Berry said the plant facility remains viable and attractive for other manufacturing uses and he is eager to find another use for the site.
"Our job now is to put our focus on the employees and to try to help those many highly skilled workers in pretty unique positions in that industry to find their next career path and to find the next project to go to that building," Berry said. "It's a great building that has been well maintained because of the products it has made through the years."
Berry said other manufacturers in Cleveland are now hiring workers "and often finding it difficult to get the skilled workers they need."
Contact Dave Flessner at email@example.com or at 757-6340