Nearly 2,000 Goodman Manufacturing employees in Dayton and Fayetteville, Tenn., will see their jobs go south over the next 18 to 36 months.
Goodman officials announced Tuesday that the company is consolidating its production at a brand new, $417 million Houston campus set to partially open in mid-2016.
Fayetteville and Dayton are home to the only non-Texas facilities operated by Goodman, which was founded in Houston in 1982 and acquired by Daikin Industries Ltd. in 2012. The Osaka, Japan-based manufacturer of heating, cooling and refrigerant products said Goodman is developing an all-inclusive compound in Texas. The new $417 million facility represents Goodman's largest single investment since its founding.
Rex Anderson, director of communications at Goodman, said Tuesday that Goodman is experiencing tremendous demand and has been looking for some time at expansion opportunities. He said the company's current facilities are operating at capacity.
Goodman is currently the largest employer in Fayetteville, a town of about 7,000, and the second-largest user of public utilities. At peak production last summer, Fayetteville Mayor Jon Law said Goodman employed around 1,800 people.
The factory now employs about 1,200 people, and Law said the vacuum of direct and indirect economic impact from lost Goodman wages, property taxes and utility use will be felt in the city.
"When you add all those together, it's a significant amount of revenue that we're going to be short on in two, two-and-a-half, three years," he said.
Law, who has been mayor just over a month, said Goodman has long been considered a staple employer in Fayetteville, but lately "we have had rumblings that there have been people in management in Houston that wanted to look at closing down our plant here in order to ship the ship the jobs to Texas.."
He said the Fayetteville plant's productivity, though, caused some second-guessing about that decision, at least until now.
Fayetteville's plant is also unionized, which requires Goodman's corporate office to give a certain amount of time heads-up about shutting down the factory.
Law said as painful as the loss will be, Goodman "took a very noble way out" by giving the city and Goodman employees a long time to plan for what's next. And he said probably about 30 percent of the plant's employees are near retirement age.
"If there is a silver lining to this cloud, it's the fact that Goodman is giving us time. And that is more valuable than anything at this point in time," Law said.
Dayton's Goodman plant, meanwhile, employs about 700 people and is not unionized.
Dayton Goodman employees were reportedly told Monday night that their plant is going to shut down, and that they now have a couple of options.
One is to ride out the transition, and upon the plant's closure, collect a severance package, two free years of college and free assistance finding other work.
Another is to move to Houston and continue working for Goodman.
Goodman officials confirmed Tuesday that severance packages will be given to its Tennessee employees displaced by the consolidation.
Goodman directors have been considering uprooting the Dayton and Fayetteville plants for some time, said Anderson.
Goodman wound up with the two plants in the course of buying out other companies.
Fayetteville's plant was formerly owned and operated by Amana. Dayton's plant was operated by Raytheon Appliances.
Raytheon became Amana Corporation, and was eventually acquired by Goodman, which brought the Fayetteville and Dayton plants into Goodman's possession.
Goodman itself has been sold three times in the last decade, including the sale to Daikin nearly three years ago.
Demand has now reached critical mass at Goodman, said Anderson, and "we literally couldn't wait much longer to make a move."
"Daikin felt it was time to pull some things together for the efficiency of manufacturing and for the value that we could add to our customers by having it in one facility," Anderson said. "We did due diligence on different locations in Texas and outside of Texas, but at the end of the day the most favorable solution for our customers and for the company was Texas."
Anderson acknowledged that by putting all its Goodman eggs in one basket, Daikin is simultaneously eliminating at least 1,900 jobs in Tennessee and affecting the workers and families of workers who depend on Goodman's employment.
"I realize that people are going to be displaced, and that's never good," he said. "You know, that's the lousy side of this story, and we empathize with those employees and we truly hope the best for them, and that's part of the reason we gave everybody advance notice, as much as we could."
Like Lae, Dayton Mayor Gary Louallen said the advance notice is at least going to help soften the blow. The city of Dayton owns the building currently occupied by Goodman and will look to find another tenant in the coming months.
"We hate to lose it, but we are happy that it's a two-year program," he said. "We're working on some new industry as we speak, and we're hoping to replace the jobs with other factories, and certainly be looking for somebody to take this building once it's vacated."
Louallen said city leaders are "just tickled that it's given us some time to react, versus like a lot of factories that will just announce they're closing, and they lock the door the next week."
"We're just thankful they have given us plenty of notice to react to this, so I thank them for that," he said.
Goodman's Tennessee factories have each been in operation for several decades. Goodman officials said the transition will take between 18 and 36 months, with manufacturing facilities probably being moved last.
Contact staff writer Alex Green at email@example.com or 423-757-6480.