Solo Cup says it will shut Owings Mills facility in 2012

Plant that employs 540 is among three being closed by Illinois-based company

June 08, 2010|By Jamie Smith Hopkins and Lorraine Mirabella, The Baltimore Sun

Solo Cup Co. announced plans Tuesday to shut its Owings Mills manufacturing facility in two years, eliminating 540 jobs and ending an operation that has been in Baltimore County for more than eight decades.

The plant, which makes paper products such as cups and containers, is one of three the Illinois-based company is closing to consolidate work across its 10 other North American facilities. Solo Cup, which says the struggling economy has sapped demand for its products, plans to shut plants in Massachusetts and Missouri next year. Together, the three facilities employ 1,240 workers.

Solo Cup acquired the Owings Mills plant as part of its purchase in 2004 of Sweetheart Cup Co. — one in a long line of deals that led to companies with deep Maryland roots moving their corporate headquarters out of state. After the shutdown, Solo Cup will have 750 to 800 workers in Maryland, or about half its work force before the acquisition.

"The decision to close our Owings Mills facility really had nothing to do with the business community," said Angie Chaplin Gorman, a Solo Cup spokeswoman who noted that the plant dates to the 1920s. "It was really the need to address overall over-capacity across our network and the fact that this plant has more over-capacity and older equipment than many of our other facilities."

The news comes as the manufacturing sector in Baltimore County has been jolted by good and bad news in recent days. On Monday, officials celebrated Middle River Aircraft Systems' announcement that it will hire 200 workers during the next year to build brake systems for jets. Days earlier, the Sparrows Point steel mill said it would shut down for 30 days and impose temporary layoffs, potentially affecting hundreds of workers.

"It's very frustrating," said David S. Iannucci, the county's economic development director. "I believe the county's economy is recovering and things are stabilizing from a year ago and moving in a positive direction, but this is a setback and terrible news for the individuals involved."

Sweetheart Cup, which moved to the area in 1919, kept county officials in the loop on expansions and changes. Solo Cup has not, Iannucci said. He said he contacted the company in April after hearing rumors of a possible plant closing but received no response.

"It's disappointing news for a company with a long manufacturing legacy in Baltimore County, a company that had a very important presence in the region," Iannucci said.

Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute, said Solo Cup's layoff plans and Middle River Aircraft's hiring announcement encapsulate Maryland's economic story: High-tech jobs come in; traditional manufacturing jobs tend to leave.

"We create lots of jobs for Ph.Ds and engineers and scientists — and lots of jobs to create services for those people — but we aren't creating lots of middle-class jobs," Clinch said.

Solo Cup said it probably would lay off workers in phases, but the schedule hasn't been laid out.

"It's going to take some time for that to get under way," Gorman said. "We know it affects the lives of our employees and their families. … It was important to us here to give them as much notice as possible."

A Hampstead distribution center that employs about 60 people will not be affected, she said. And a manufacturing plant that employs 550 in Federalsburg — in Caroline County on the Eastern Shore — is poised to expand. The company says its remaining plants could gain 10 percent to 15 percent more jobs through its consolidation.

Owings Mills workers whose jobs are targeted will be invited to apply for the Eastern Shore positions, Gorman said. Eligible laid-off workers will receive severance, she said.

The other Solo Cup employees remaining in Maryland work in the Owings Mills complex in nonmanufacturing jobs. Gorman said the 120 corporate positions and 20 warehouse jobs will be located in the area for the "foreseeable future," though the company hasn't decided where to move them when it sells the 1.4 million-square-foot complex on Reisterstown Road.

The building will go on the market soon, but Solo Cup doesn't expect a quick sale in this difficult environment for commercial real estate.

About 80 percent of the company's business comes from restaurants and other food-service firms. The rest of its products are bought directly by consumers in stores, from plastic plates to paper cups.

"Both of those things, whether it's eating out at a restaurant or buying fancy plates for your party, are discretionary purchases," Gorman said. "And when the unemployment rate is high, people tend to cut back."

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