Thanks to outsourcing.



Plant's closing to deal $37.9 million blow

By Julie Bisbee
The Oklahoman

The expected loss of labor income in Grady County after Delta Faucet Co. closes its Chickasha plant would be about $37.9 million, according to state Commerce Department figures released Thursday.
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That's roughly one-third of the county's total personal income, said Robert Dauffenbach, University of Oklahoma economist.
The department estimated that most jobs at the Delta plant paid about $17.88 an hour.
Delta announced Tuesday that it would close its plant that employed 590 people. The factory has made residential and commercial faucets in Chickasha since 1976. Company officials say the plant will close in the next nine to 11 months.
The Commerce Department estimates that 1,029 jobs will be lost in Grady County. Since many Delta workers drive from other parts of the state, the overall loss of jobs in the state was estimated to be 1,384. That total includes all employee jobs, positions at businesses that provide goods and services to the factory, and jobs lost because employees have less money to spend at stores or restaurants.
"That's a pretty heavy blow," Dauffenbach said. "I suspect those are fairly well-paying jobs, and they're not an easy blow to recover from. Just imagine how celebrated having 600 jobs come would be."
Delta's parent company, Michigan-based Masco Corp., said closing the Chickasha plant is part of a plan to reduce operating costs by $200 million, consolidate North American operations and increase overseas outsourcing. Delta has production facilities in Greensburg, Ind., Jackson, Tenn., and Panyu, China.
"What we're seeing here is the continual playing out of the global economy," Dauffenbach said. "I suspect this work isn't landing anywhere else in the United States."
City officials said the projected loss the closed Delta plant would bring to the community of about 16,400 seemed high.
"We have no way of verifying any of this information, but we don't think it's accurate," said Marilyn Feaver, president of the Grady County Economic Development Council and the Chickahsa Chamber of Commerce. "But it's the best we have to work with. If this were true we would have experienced the same loss from ArvinMeritor leaving."
Auto-parts maker ArvinMeritor announced last fall that it would take its shock and strut manufacturing and 270 jobs to its plant in central Mexico.
The economic effect is figured using a computer program that includes variables such as employee commuting patterns, said Kathleen Miller, director of research and economic analysis for the Commerce Department. "Those are merely estimates," Miller said. "We think it's better to estimate higher. Wouldn't it be great if this was higher than reality."