Loss of plastics plant to cost Durant 150 jobs
Saturday, November 12th 2005, 3:58 pm
By: News On 6
OKLAHOMA CITY (AP) _ Cornerstone Products, Inc., which is located in Durant, Okla., will close Sunday after more than 20 years in business.
The bankrupt company is shutting down after higher resin and energy costs forced the plastics molder to stop production. About 150 Oklahomans will have to look for new jobs.
``It's really heartbreaking to see anybody lose their jobs and to close a facility of this size,'' said Tommy Kramer, executive director of the Durant Industrial Authority.
Kramer said other companies in Durant are expanding and may hire some of the former Cornerstone employees. Among them is CustomerLinx, which plans to hire about 100 additional workers for its customer-service call center. A bio-diesel plant under construction is expected to add more than 70 jobs, he said.
``We're going to be able to absorb those job losses,'' Kramer said.
In Durant, Cornerstone has a 550,000-square-foot manufacturing plant and a 350,000-square-foot distribution center. Although production will cease, the company is expected to keep a few workers on until the end of the year as it distributes remaining inventory, Kramer said.
Prices for resin, a key raw material in plastics production, have jumped more than 20 percent since August. Cornerstone cited rising raw materials costs as one of the reasons it filed for bankruptcy in July.
Tommy Southall, director of industry information services for the Society of the Plastics Industry in Washington, said plastics manufacturers also are dealing with higher prices after Gulf Coast hurricanes affected production at several resin plants in late summer.
``Resin is a big portion of the costs of a lot of plastics manufacturing,'' Southall said. ``When the price goes up, that hurts the bottom line. It's not always possible to pass the price increases along to the customer.''
Cornerstone's unsecured creditors have asked a federal bankruptcy court in Plano, Texas, to liquidate the company's assets after it became clear it could not reorganize. In its July filing, Cornerstone listed debts of $59.6 million and assets of $65.7 million.
The company has retained Chicago-based Mesirow Financial to assist with a possible sale of its assets. According to bankruptcy documents, Cornerstone received one bid for $15 million from Milestone Capital in Greenwich, Conn., but rejected it as being too low.
Cornerstone was a key contractor for Rubbermaid until 1999 when Rubbermaid began making its own molded products. Cornerstone then debuted its own line of products and saw sales rise to $96 million by 2004. Wal-Mart, Home Depot and Target were among the large retailers that stocked Cornerstone goods.