For several years now the City of Shelbyville has worked to diversify its manufacturing tax base.
The goal is to be less reliant on the automotive industry – one that is in full shut down mode during the novel coronavirus pandemic.
Many of Shelbyville’s manufacturing facilities that produce parts for big-name automobile companies are running at less than full capacity. And some, like PK USA, is in full shut down mode for the immediate future.
PK USA kept producing parts to fill its orders and stockpiled its inventory before taking the plant “dark.”
“We have no production at all three of our plants,” said Bill Kent, PK USA’s vice president of corporate relations Tuesday afternoon. “All of our customers are shut down.”
PK USA is at the mercy of the automobile industry that is currently shuttered across the country. And just when those plants will come back to life is what Kent is waiting to hear.
“We’re hearing restarts next month but I can tell you they change the dates constantly,” said Kent. “We’re all eagerly awaiting to hear what the governor has to say.”
Governor Eric Holcomb will address the future of the state Friday at 2:30 p.m. The current stay-at-home order expires this week. There are no indications whether he will extend the order or loosen some of the restrictions that would allow businesses to re-open.
PK USA took a conservative approach when the shut down started reaching Shelby County. The company continued paying its employees’ benefits for five weeks before that ended Monday. The company sent a letter to its employees that current layoffs should be considered permanent. PK USA does expect to recall employees but that timeframe is unknown.
“It was a total of 483 folks,” said Kent. “It was terrible. We paid their benefits for five weeks while we had no money coming in. That was part of our commitment to our workforce.”
PK USA is maintaining a small crew that is preparing the plant for the day it can resume production.
“It’s a full-time job just preparing for the day we return,” said Kent. “From redesigning the cafe for social distancing to looking at jobs in the factories for proper safety precautions. There will be an orientation as to what the ‘new normal’ is (when we return).
Before the shut down, PK USA was preparing for a new line to supply Ford. That work is still being completed.
“The contractors are still putting the equipment together. That represents a $16 million investment,” said Kent.
Earlier this week, Indiana Grand Racing and Casino announced more than 1,000 members of its staff were being let go.
“I know the casino hopes to back to full capacity,” said Brian Asher, executive director of the Shelby County Development Corp. “I saw their WARN (Worker Adjustment and Retraining Notification) letter which you have to do when you lay people off.”
Asher could not confirm what other manufacturing facilities in Shelbyville have lowered staff levels significantly, but he said most are running at less than capacity.
“A majority, from what I hear, are running a skeleton crew,” he said.
With the recent additions of POET’s ethanol refinery, Ranger Power’s solar facility in northeast Shelby County and Greenleaf Foods, Shelbyville has trumpeted a more diversified tax base but the pandemic has shown just how reliant the city and county still are on the automobile industry.
“All things are on the right track for the future,” said Asher.
“We’re getting outside of the automotive reliability but it’s not an overnight fix. It’s been three to five years of trying to recruit companies outside the automotive field.”
Once the automotive industry fires back up, it will take weeks for local companies to get back to full capacity.
‘The focus is sometime in May to start the process, but it will be slow,” said Kent, who has championed his company and its mostly local employees before the Shelbyville Common Council on several occasions.
“I walked through the plant when it was totally dark after the shut down and I had a tear in my eye,” he said. “We have great people. Sadly, we couldn’t keep them all employed.”
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