400 jobs ending at fish plant

Icelandic to close Cambridge factory

December 15, 2006|By Allison Connolly | Allison Connolly,Sun Reporter

Icelandic USA Inc. is closing its fish processing plant in Cambridge, in Dorchester County, leaving 400 employees looking for work in an area that has been hard hit by the loss of solid manufacturing jobs.

The plant, one of Cambridge's largest employers, has been processing and packaging frozen fish sticks and beer-battered cod since 1968. Icelandic notified workers Tuesday that it is consolidating operations near its headquarters in Newport News, Va., and will close the Maryland facility in phases by the end of next year.

A subsidiary of Icelandic Group hf of Reykjavik, the company said in a statement that it was closing the plant to save on production and distribution costs.

United Food and Commercial Workers Union Local 27, which represents the workers, negotiated severance packages that include health and welfare benefits of up to 26 weeks based on seniority. The company also will provide workers with letters of recommendation.

Local 27 President Buddy Mays said workers had been worried for some time that the company would move operations to Virginia, where it has a production facility and a new distribution center. The jobs paid well, on average between $10 and $15 an hour, and most of the workers lived in Cambridge, he said. There aren't many other jobs like it in the city, he said.

"We're going to do everything we can to place them," Mays said of the workers.

With a population just shy of 11,000, the city will feel the loss, said Cambridge Treasurer and City Clerk Edwin Kinneman.

"The fact that they're leaving will have an economic impact on the city, in terms of revenue," Kinneman said. "But I feel badly for the people."

While there is another large manufacturer in the city, The Mushroom Co., displaced workers will likely have to travel to other cities on the Eastern Shore such as Easton and Hurlock to find similar work, he said.

The closing comes as the city assembles its first economic development staff and looks to annex land for an industrial park near the Cambridge-Dorchester Airport, Kinneman said.

The closure is part of the national decline in manufacturing, said Robert G. Lynch, chair of the economics department at Washington College in Chestertown. He said the displaced employees will be hard-pressed to find entry-level jobs with the same pay and benefits, and it will have a noticeable impact on restaurants and stores in the region.

"That's a lot of jobs," Lynch said.

But Cambridge is in much better shape to absorb the loss than it was five years ago, said Memo Diriker, director of the Business, Economic and Community Outreach Network at Salisbury University.

The opening of the 400-room Hyatt Regency Chesapeake Bay Golf Resort, Spa and Marina on the Choptank River in 2002 about a half-mile from the Icelandic plant was pivotal, Diriker said. Before it opened, the city's unemployment rate was 12 percent, and Cambridge and surrounding Dorchester County were among the state's poorest jurisdictions.

A number of large manufacturers had shuttered their plants in the region over decades, beginning with Phillips Packing Co. in 1956 and followed by Tyson Foods Inc., Black & Decker Corp. and Campbell's Soup Co.

The Hyatt waterfront resort quickly became a popular destination for meetings, Diriker said. The corporate types who flew into the local airport on private jets saw the potential for restaurants and antiques stores and began building. The area had sewer and water capacity, he said, which is a major lure for developers building townhouses and summer homes.

Like the rest of the Shore, Cambridge is benefiting from an influx of baby boomers looking to retire in the still-affordable communities.

However, the available jobs are in related fields such as health care, construction and the lower-paying service sector, which won't immediately help the workers laid off from Icelandic.

"The skill sets don't match," Diriker said.

Christine Searles, director of human resources for Icelandic, was at the 200,000-square-foot plant yesterday to answer employees' questions. She said a number of local companies are interested in hiring them, including one considering a major expansion, which she declined to name.

Searles said workers will not be offered the option of moving to the Virginia plant as the company streamlines its operations. "We're trying to reduce redundancies, she said.

Frank Milligan, a production worker at the plant for four years, said he thinks most employees will land on their feet. He is looking to expand a home-based business he owns.

"I think I'm going to be pretty well fixed -- it's not going to be too bad," he said.


Sun reporter Chris Guy contributed to this article from Cambridge.

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