After a two-year reprieve, Danville’s Red Wing plant will close at the end of the year, a company official confirmed Tuesday.
Peter Engel, a spokesman for the Red Wing, Minn., company, said the Hustonville Road manufacturing facility will be shuttered Dec. 31. There are currently 68 employees at the plant who will lose their jobs.
In 2009, the company announced it would close the Danville factory, which at the time employed about 200 workers, and shift its production capacity to its Potosi, Mo., plant.
At the time, Engel said the national recession and the increased unemployment in the construction sector that makes up a large portion of Red Wing’s market led to the restructuring.
“Three years ago, we announced a plan to restructure our domestic manufacturing operations in response to economic conditions. We had planned to consolidate our operations at two plants, resulting in the closure of the Danville plant in early 2010,” Red Wing President Dave Murphy said in a statement Tuesday. “Fortunately, demand for our footwear increased, and we needed to continue to operate the Danville plant, albeit at reduced levels, until our other facilities were able to add capacity and absorb the increased demand. Shoemaking is a skilled trade, and it takes time to recruit and train workers to our high standards. Keeping Danville open gave us the flexibility we needed to meet customer demand.”
Red Wing sold the building to Lebanon developer Fred Hilpp, who owns a number of other commercial properties in the area. After an unexpected upturn in orders from retailers in 2010, though, the decision was made to lease the facility back and continue manufacturing there with a reduced workforce.
The company never completely discarded its original restructuring plan laid out when the Danville factory was originally slated for closure. Engel said the decision was made to follow through on the plan in large part because production capabilities and workers were added in Potosi and the plant near Red Wing’s headquarters in Minnesota. The company expanded its Missouri factory by 20,000 square feet last year and added 90 workers, in addition to increasing the workforce at its Red Wing, Minn., plant by 20 percent.
Jody Lassiter, president and chief executive officer of the Danville-Boyle County Economic Development Partnership, said the Danville factory had continued to face the same disadvantages compared to Red Wing’s other facilities despite the temporary stay it received in 2010.
“Two years ago, Danville got a reprieve from the closure of this facility due to the quality of local workmanship and increased demand for Red Wing work boots,” Lassiter said in a statement. “However, as demand has leveled, the Red Wing, Minn., and Potosi, Mo., plants have more than enough capacity to meet that demand. This was the same reason for the first closure announcement in 2009. The Danville facility is smaller, older and landlocked, so Red Wing is essentially following through on the simple business decision it made three years ago. I regret that these 65 craftspersons are facing this decision again, and my job is to find them employment opportunities elsewhere."
Engel said employees will be given severance packages that include vacation pay and health savings account contributions for 2013. Engel said the last day of work will be New Year’s Eve, and the company will devote some resources to helping the employees find jobs.
It is unclear what will happen to the building now that the company is leaving. Engel said Red Wing likely will maintain its lease through 2013 while equipment is removed from the facility.