One of the biggest manufacturers in Ooltewah is shutting down this month as its owner, EnerSys, shifts away from the type of batteries made at the factory.
Hawker Powersource is closing its battery production plant in the Ooltewah Industrial Park by Aug. 28, cutting 165 jobs. EnerSys, the Reading, Pennsylvania-based global battery maker that owns Hawker Powersource, gave workers at the plant a 60-day notice of the plant closing just ahead of the July 4th holiday and is in the process of phasing out production this month.
The company said it will boost production and distribution in Kentucky and other locations to replace the Ooltewah plant. On June 29, the board of EnerSys voted to close the Ooltewah plant to focus on making and distributing newer, more maintenance-free batteries made at other plants.
"Management determined that future demand for traditional motive power flooded cells (made in Ooltewah) will decrease as customers transition to maintenance-free product solutions in lithium and Thin Plate Pure Lead (TPPL)," the company said in an announcement of the Ooltewah plant shutdown. "As a result of the closure, EnerSys expects to eliminate nearly $8 million of costs per year. Production of products being manufactured in Ooltewah, Tennessee will be moved to existing EnerSys facilities in North America."
Several displaced workers at the Hawker Powersource plant said they were surprised by the announcement of the plant closing and are now scrambling to find new jobs.
Josh Francis, a 42-year-old grid casting associate who has worked at Hawker Powersource since 2010, said the layoff announcement "was very nerve racking" and has forced him to update his resume and interview with other area employers.
"This was a good company to work for, but there are a lot of other good companies in the area looking for workers," Francis said Friday while updating his resume in a mobile computer lab set up by the Tennessee Department of Labor and Workforce Development outside of the plant Friday to help the displaced workers.
Others seek to hire displaced workers
Inside the foyer of the factory, more than a dozen area employers set up booths Friday during a job fair for the Hawker employees about to lose their jobs. Major employers such as McKee Foods, Mueller Co., Coca-Cola Bottling Co. Consolidated, Kenco, Monroe Corp. and Metalworking Solutions talked with the Hawker workers about job opportunities with their plants.
"A lot of companies are hiring right now, but it may be tough to match what we had here and I'm worried about having to take a pay cut," said Tony Crutcher, a 40-year-old machine operator who says he makes about $26 an hour at Hawker. "It's hard to start all over at this point in your career."
Hawker Powersource filed a WARN notice of the plant closing on June 29 to comply with the 60-day notice required for major layoffs or plant closings by a business. In response, the state's rapid response team offered through the American Job Center met with employees at Hawker on July 26-28 to explain the layoff process and how workers can apply for unemployment benefits, qualify for training for other jobs and apply for other jobs in the state's listing of job openings, which included 394,539 open jobs across the state on Friday.
"The job market is certainly more favorable now than in past years when we've had these types of plant closings during economic downturns," Michele Holt, executive director for the Southeast Tennessee Development Workforce Development board, said in a telephone interview Friday. "The overall market is still pretty healthy and I know a lot of the workers being displaced (at Hawker) have already found other employment. We're on site today to help those who may need some additional assistance."
Summertime plant closings
The closing of Hawker Powersource is the second manufacturing plant in East Tennessee to reduce operations this summer. In June, the Waupaca Foundry in Etowah, Tennessee shut down most of its production, cutting 540 jobs.
Waupaca idled its melt, molding and core room production in McMinn County in June, although it has continued its iron casting processing operations in Etowah but with only a fraction of the 683 employees the company had at the 21-year-old plant at the beginning of the year.
In Ooltewah, Hawker Powersource bought the former American Bicycle Group plant on Ooltewah Industrial Drive for $1.2 million in 2015 when the bike maker moved to a bigger location on Amnicola Highway.
Hawker has since upgraded the facility for its battery production geared primarily for battery-powered forklifts. Most of the 130,000 square feet of factory and office space used by Hawker in Ooltewah was originally built in 1988.
Hawker Powersource is the largest brand of industrial lead-acid batteries in the world and operates more than 32 manufacturing facilities around the world serving over 10,000 customers from a wide range of industries in 100 countries.
In its quarterly earnings report this week, EnerSys estimates shutting down the Ooltewah operations will cost the company a total of $18.5 million, including $7.3 million of non-cash charges relating to fixed-asset write-offs recorded in the most recent fiscal quarter. Additional expenses are expected through the balance of calendar 2022 for severance pay, cleanup related to the facility, contractual releases and legal costs.
Despite the cutbacks in Ooltewah and supply chain problems in recent months, EnerSys CEO David Shaffer told industry analysts on Thursday that overall sales for EnerSys were up by more than 10% to $899 million in the most recent fiscal quarter.
"Overall, market dynamics point to a strong and steady growth for motive power with benefits from the trend to automation and electrification of material handling equipment, along with the value of our maintenance-free technologies and advanced wireless charging solutions expected to have a lasting impact on our growth in years to come," Shaffer said in the company's first-quarter earnings report. "Motive power should also benefit from improved maintenance free and charger mix, additional price recapture and structural cost improvements, such as the announcements of our Ooltewah, Tennessee plant closure and our Richmond, Kentucky Mega-Motive power DC opening."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340. Follow in Twitter at @Dflessner1