Local workforce gets good, bad news. - Waco Tribune-Herald (Waco, TX)

Byline: Mike Copeland

Aug. 4--Waco's employment scene on Wednesday received a jolt of bad news from the Rock-Tenn packaging plant but good news from a company called EMSI.

Rock-Tenn announced it will close the plant at 401 Precision Drive that it bought from Gulf States Paper Co. earlier this year. About 170 people will lose their jobs after Oct. 1.

EMSI, meanwhile, held a news conference to announce it has invested a half-million dollars in its Waco and Hewitt locations and will be hiring 'at least 70 people' over the next five years, said Mark Davis, president and CEO of the Irving-based company.

Waco Mayor Virginia DuPuy learned of Rock-Tenn's decision after touring EMSI's Waco plant.

'I'm really surprised and disturbed to hear of the closure of Gulf States,' she said. 'We'd better get to work very, very quickly because having 170 people laid off is critical. The community as a whole is solid and growing economically, but you hate to hear of something like this happening. It is very distressing.' McLennan County's unemployment rate for June, the latest month for which figures are available, was 5.3 percent. That's down from 5.9 percent in June 2004.

DuPuy said she would be calling the Heart of Texas Workforce to make sure its rapid response team has heard the news about Rock-Tenn.

Rene Clayton, manager of business and industry for the Heart of Texas Workforce Development Board, said the team can arrange classes on interviewing, completing resumes and coping with the loss of a job.

'When one member of a family is affected, everyone is affected,' Clayton said.

City Manager Larry Groth called Rock-Tenn's decision 'disheartening,' and said he feels for the people who will find themselves out of work.

'It's good to be having announcements and creating jobs, but for the individuals at Rock-Tenn, this is not a good day,' said Groth, who doubts that the jobs being lost at Rock-Tenn match those being gained at EMSI. 'These are quite a bit different businesses.' The Rock-Tenn facility in Waco turns paperboard into folding cartons for ice cream, crackers and other products. Rock-Tenn, based in Norcross, Ga., acquired the Waco plant from Gulf States in April along with a dozen other facilities nationwide in a $450 million deal.

EMSI, meanwhile, works with insurance companies to qualify people who have applied for coverage. Its employees retrieve medical records and conduct phone interviews with people, posing questions about their health, lifestyle and hobbies.

The two local EMSI facilities employ about 625 people between them.

Davis said the company has other major call centers like those in Waco, but the local ones 'represent our flagship.' EMSI was given $75,000 from the Waco-McLennan County Economic Development Corp. fund to use in upgrading its two local facilities.

Davis said the company also has been promised sales tax refunds from the state on new computer equipment it will buy.

Davis said 70 is the minimum number of people the company will be hiring locally. It could need a 15 percent staffing increase, which could push that figure to 90. Applicants need good telephone skills and those hired will make at least $10 an hour and could earn more in incentives.

Meanwhile, at Waco's Rock-Tenn plant, employees are bracing for layoffs that will begin in 60 days.

'Gulf States' Waco plant was the weakest performer in the Gulf States system, and, based on our operating review, we cannot justify the investment that would be required to continue operations at this plant,' Mike Kiepura, executive vice president of Rock-Tenn's folding carton division, said in a statement the company released.

The company said it will spend about $3.5 million on severance packages and to relocate equipment. The closing will reduce annual operating costs by about $3 million.

Jim Vaughan, president of the Greater Waco Chamber of Commerce, said he was disappointed to hear of Rock-Tenn's closing in Waco. He said Gulf States had been a member of the chamber since 1962.

'We have been concerned about the company's future here even before the April sale to Rock-Tenn. So on two occasions, most recently on June 27, the chamber confirmed meetings with plant management and City Manager Larry Groth and County Judge Jim Lewis to explore opportunities to assist the company,' Vaughan said in a statement. 'Both meetings were postponed by the company.

'We were encouraged following our last contact with local management in July,' the statement added, 'so this was obviously a corporate decision.' Vaughan said the chamber has offered to help Rock-Tenn find local employment for its displaced workers.

David Rees, investor relations analyst for Rock-Tenn, said he could not comment on whether Waco employees would be offered jobs at other Rock-Tenn facilities. He also declined to say whether Rock-Tenn would be closing any other plants acquired from Gulf States.

Mayor DuPuy, reached later in the day Wednesday, said she was told some Waco employees may be offered work at the Rock-Tenn plant in Waxahachie.

With the closing of the Waco facility, Rees said, Rock-Tenn will have 28 folding-carton plants, including those in Greenville and Waxahachie, Texas.

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Copyright (c) 2005, Waco Tribune-Herald, Texas

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