Published 12:00 am Friday, March 8, 2002

jobs expected to be lost as Kmart, Exide plan shutdownsand Vicksburg Chemical parent company files for bankruptcy

The Vicksburg Big Kmart at 3408 Pemberton Square Blvd. wsa on a list of 284 stores that will close as a result of a corporate reorganization. (The Vicksburg Post/MELANIE DUNCAN)

[03/08/02]One Vicksburg industry shut down today, another said it will soon and the local Kmart appeared on a list of 284 stores the giant retailer will close.

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Vicksburg Chemical halted operations this morning and sent 65 of its employees home after its parent company filed for bankruptcy.

Exide Technologies, formerly GNB Batteries, announced it will close its Vicksburg plant on May 10 as part of a restructuring of the company. The facility on the Vicksburg Harbor produces battery covers for automobile and marine batteries and employs 114.

While hopes had been high for the Vicksburg Kmart, it and five others in Mississippi were on a list released at midmorning, meaning 70 employees here may be jobless. Overall, Kmart is losing 13 percent of its total stores and 9 percent of its workforce, or 22,000 jobs.

There was no indication when the store would close its doors.

John Miles, vice president of operations at Vicksburg Chemical, said Cedar Chemical Corporation, based in Memphis, filed for Chapter 11 bankruptcy this morning.

“We will work through this process to achieve the best results we can for our creditors, customers and employees,” Miles said.

He said the 65 employees involved in the layoff represent about 60 percent of the plant’s workforce.

Operations at the plant on Rifle Range Road have been shut down temporarily, Miles said.

“We don’t know for sure when production will resume,” he said.

Of the remaining employees some are office workers, Miles said, and others will maintain the safety and enviromental security of the plant.

Vicksburg Chemical manufactures different agricultural fertilizers, which are shipped all over the world. The plant site was one of the first large industries to come to Vicksburg in the 1960s. Products have varied through the years.

Miles said the company will have to see what direction the bankruptcy takes before making any other decisions.

“From here on out a lot of this is going to be up to the bank, so we will have to wait and see what they do,” Miles said.

Chapter 11 bankruptcy is often referred to as “business reorganization,” and it is the most complex area of bankruptcy law. Chapter 11 requires a proposed payment plan and allows creditors the opportunity to vote on the plan.

If enough creditors vote in favor of the plan, it is usually approved. In essence, that would rewrite many of the contracts the debtor has with the creditors.

Cedar Chemical is a privately held corporation owned by New York-based Trans-Resources Inc. The TRI group of companies has eight operating sites worldwide with sales of $500 million.

Exide Technologies, based in New Jersey, will also close a Flowood plant and eliminate 122 positions there, according to the Thursday announcement.

“The decision to close the facilities was not an easy one, and we feel deeply for employees affected by this action,” Craig H. Muhlhauser, Exide’s president and chief executive, said in a statement.

Exide Technologies is an industrial and transportation battery producer and recycler with operations in 89 countries. The company’s operations in Mississippi will be moved to an Exide plant in Lampeter, Pa.

The Vicksburg Kmart opened in July 1991 on Pemberton Boulevard. Last month, its manager, Andrew Gibbs, predicted the 87,000-square-foot store would survive because of its business volume and faithful customers.

Kmart filed for Chapter 11 bankruptcy protection in January. Also on the list were stores in Biloxi, Hattiesburg, Gautier, Laurel and Pascagoula. Eight stores were listed for closure in Louisiana, but none near Vicksburg.

The city helped bring Kmart to Vicksburg by floating a $275,000 bond and using tax increment financing to help with the infrastructure development around the store.

In 1999, Kmart was transformed into a supermarket, and the name changed to Big Kmart in an effort to boost sales.

Employment information from the Mississippi Employment Security Commission released Thursday was also dour.

The county’s jobless rate was 5 percent for January, up from 4.1 percent in December. The state average also grew to 6.9 percent from 5.9 percent, the highest level in a year and a half.

Locally and across the state, the rise in the unemployment was blamed on seasonal retail job reductions and the winter slowdown in agriculture, construction and forestry.

“January is traditionally the slowest month for retail, but things will pick back up,” said Jimmy Heidel, director of the multiple economic growth groups in Vicksburg.

Heidel said that local officials will work with Exide between now and May to find another industry to purchase the facility.

“We’ve got about three or four prospectives coming in the next few months,” he said.

Heidel also said there will be about 700 new jobs coming to the area by the summer including the opening of a Nissan supplier at the Ceres Research and Industrial Interplex at Flowers. CalsonicKansei Mississippi is expected to open in May or June and employ about 119 people.

It will be followed next year by Yorozu Automotive Mississippi, which will employ about 120.

The MESC said across the state, about 6,800 people hired by retailers for Christmas lost their jobs in January. In addition, there were 2,400 fewer jobs in agriculture and construction in January compared with December.

MESC director Curt Thompson said he expects February’s numbers to show improvement.

“As the nation appears to be recovering from the recession, we expect Mississippi to follow suit,” Thompson said.

Lafayette County had the lowest rate, at 2.6 percent. Rankin County was next, at 3.2 percent, followed by Oktibbeha County at 3.4 percent.

Warren County had the 12th lowest rate in the state.

Nationally, the rate increased from 5.4 percent to 6.3 percent.

Issaquena County had the highest rate in the state at 27.3 percent, up from 21.1 percent in December. Sharkey County’s rate also rose from 16.3 percent to 21.3 percent, the second highest in the state.

Claiborne County’s rate rose from 9.2 percent to 10.6 percent.