Shoe Co. to close Kentucky plant

Red Wing Shoe Co. announced Tuesday that it will officially close its Danville, Ky., plant at the end of the year.

“It’s more efficient to run two plants than three plants,” Shoe spokesman Peter Engel said Tuesday. The Shoe also operates plants in Potosi, Mo., and Red Wing.

This is the second time the Shoe has announced that the Kentucky plant will close. In November 2009, the company put in action a restructuring plan calling for the closure to deal with a downturned economy.

But just five months later, the economy had improved and the Shoe opted to keep the plant open, though it reduced manufacturing capacity there to just one-third of its previous capacity.

“It’s just time to complete the closure,” Engel said Tuesday.

This week’s announcement stated that the plant’s last day will be Dec. 31, 2012.

Along with the 2009 closure announcement, the Shoe also called for the plant’s 200 employees to be laid off. When it was decided to keep the plant open, about 70 of those employees were brought back, Engel said.

“We recalled them to work indefinitely,” he said.

With the latest closure announcement, the Shoe said 68 employees will be affected, and the company is working to provide them with resources to help find new employment.

Engel said the only employee from the Danville plant who will be transferred to another facility is the plant manager.

Preparations begun

In 2009, the Shoe’s other two plants began preparations to absorb the Kentucky plant’s manufacturing capacity. In Potosi, 20,000 square feet of production space was added and 90 new employees were hired.

New employees were also hired in Red Wing, Engel said, and employment is up 20 percent in the last three years; that number includes the rehiring of second-shift employees, who were laid off in the restructuring and brought back in the summer of 2010. Engel would not say how many new employees were hired outside of the second-shift rehires.

Now, Shoe officials said the space and employees are ready for the Danville plant’s closure.

“Shoemaking is a skilled trade and it takes time to recruit and train workers to our high standards,” Shoe President Dave Murphy said in a statement. “We needed to continue to operate the Danville plant … until our other facilities were able to add capacity and absorb the increased demand.”

In addition to completing the plan set in motion three years ago, Engel added that the economy is still a factor in the decision to close. Even though the unemployment rate is going down and the economy improving, the construction industry — which includes a large sector of the Shoe’s customers — has been lagging behind.

“That part of the economy has been really slow to come back,” Engel said.

However, both Engel and Murphy said the Shoe is now in a position to handle any increase in demand, should it come along as the economy continues to improve.

“In the near term, this restructuring will allow us to manufacture the same volume of footwear, with outstanding quality, at lower costs in our two remaining facilities,” Murphy said.

“In the long term, (it) will allow our capacity to be scaled to meet increased future demand.”

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