Cape County to issue bonds for P&G plant

JACKSON, Mo. -- The Cape Girardeau County Commission plans to issue $200 million in bonds and provide tax breaks for Procter & Gamble to upgrade its local diaper plant, a move that ultimately will eliminate hundreds of jobs but should improve the bottom line for one of the area's largest employers.

A company spokesman said the job loss would be handled through "normal attrition" and early retirements, but no layoffs.

The commission voted Monday to issue the bonds, but the final agreement won't be signed until Dec. 27, after attorneys for the county and P&G have reviewed it.

As part of the agreement, P&G will receive tax breaks for the next 20 years while it pays off the bonds. The tax breaks will save the company $2.5 million in personal property taxes on its new equipment.

The company will pay $475,000 a year for 20 years to local governments to offset the tax abatement, with the Jackson School District receiving 80 percent of the money.

Gerald Jones, presiding commissioner, said the annual payment is more than the $458,000 a year in personal property taxes on average paid by P&G on its diaper plant equipment over the last five years.

But Mitch Robinson, the county's industrial recruiter, said that's still less than the estimated $600,000 a year in personal property taxes that the plant would have to pay on its new equipment without tax abatements.

Robinson said Tuesday that P&G wants to further automate its diaper plant to reduce labor costs.

"These machines will produce much more effectively and efficiently than existing production lines," said Robinson, who heads the Cape Girardeau Area Industrial Recruitment Association.

Long-term improvements

He said the new equipment, to be installed over several years, can improve the long-term viability of the sprawling plant in northern Cape Girardeau County.

P&G constructed the plant in 1968 and began manufacturing Pampers disposal diapers in 1969. The plant has expanded its products since then, but the manufacture of disposal diapers remains a major part of its operations.

The giant consumer-products manufacturer based in Cincinnati, Ohio, announced earlier this year that it would eliminate 5,600 jobs in the United States, its largest cut in 163 years.

Overall, 24,000 job cuts -- mostly overseas positions -- have been announced over the past two years at a company once regarded by workers as a job-for-life employer.

Early retirements

Larry Stahlman, plant spokesman, said he doesn't know how many jobs will be lost at the local plant through automation. He said the company has offered employees early retirement. "We have had a number of folks retire already," he said.

The plant currently employs 1,600 people.

One employee, who asked not to be identified, said he and other workers don't expect layoffs. "I don't know of anybody who is afraid of being forced out of his job," he said.

He said many of the plant's workers have been there at least 15 years. He said he knows of longtime workers who have accepted buyouts.

Even with the loss of some jobs, Robinson predicts the plant will continue to be one of the county's top employers.

Jones said the commission has concerns about job losses with any industry. "There is always concern if we feel like a company is downsizing. We want to retain our job market in Cape County."

But he said the bond issue will help keep the P&G plant in Cape Girardeau County.

"It is tough out there right now," said Jones. "We don't want to lose it all."

mbliss@semissourian.com

335-6611, extension 123