DeWitt still looking for business to replace Vise-Grip

It’s been five weeks since officials at Newell-Rubbermaid announced that its Vise-Grip plant in DeWitt would close late this month or early next.

Since then, community leaders have been searching for another business to move to town, occupy the building and, hopefully, employ some of the more than 300 employees who will lose their jobs when the factory closes.

So far, they’ve had little luck.

“I can’t tell you that we’ve had any bites,” said Jason Sokolewicz, an economic development consultant with NPPD — one of several groups working with the village of DeWitt to attract a new business to town.

NPPD put together and sent a brochure to businesses and trade journals advertising the 376,000-square-foot building housing Vise-Grip, and also the workforce of 330 the company employees.

The Nebraska Department of Economic Development and Gage County Economic Development also are working with the Saline County community of 550 to find something to replace the Vise-Grip plant, which operates under the name Irwin Tool, said DeWitt Village Board Chairman Randy Badman.

Sokolewicz said it benefits NPPD — the community’s electricity provider — to find a new business to replace Vise-Grip.

“It’s a good thing for us to have business and people employed in  the communities that we serve,” he said.

But the recent downturn in the economy has made that task more difficult, he said.

“It’s not the best time, obviously, but there’s still companies that are solid financially that are still making investments,” he said.

Spokesman David Doolittle said Newell-Rubbermaid is working with state, county and local groups to find a new use for the Vise-Grip building.

Newell-Rubbermaid is considering auctioning off the property, once production at the factory stops, Doolittle said. But when that will be is still unclear.

“We just need to make sure that we wrap up our operations in an orderly  manner,” he said.

Doolittle said Newell-Rubbermaid also has worked with Nebraska Workforce Development and other agencies to help Vise-Grip employees find new work.

“It was a very difficult decision to make,” Doolittle said of closing the plant. “We realize the impact it has on the community, and we’ve been working hard to help our employees transition to new employment, and we’re going to continue to do that.”

That, he said, involves offering employees a severance package, one he called generous.

But that package has drawn criticism from senate candidates Mike Johanns and Scott Kleeb, as well as from Vise-Grip employees.

The package is not a severance package, per se, said Ronald E. Joyce, administrator of the benefits department of the Nebraska Office of Workforce Services. Rather, he said, it’s something called a sub-pay package.

Sub-pay works like this: When their jobs with Vise-Grip end, plant employees can apply for unemployment benefits, which will pay half of their weekly salary each week for up to 26 weeks.

Newell-Rubbermaid will pay the difference between unemployment payouts and the employees’ average weekly salaries for up to 13 weeks after the plant closes. How long each employee will receive sub-pay benefits will correlate to how long they were employed by the company.

So for 13 weeks after the plant closes, eligible employees will receive approximately their full salaries, Joyce said. After that, they can continue to receive unemployment, though not severance pay.

Using sub-pay instead of a severance program, in which the company making the layoffs pays an employee’s full salary for a set amount of time, is a common practice, Joyce said, and one that his office had to approve first. 

“A number of large businesses do have sub-pay packages,” he said.

Johanns, though, has criticized the relatively short duration of the sub-pay benefits, said his spokeswoman Sarah Pompei, especially given that some employees have been with the plant for decades.

His opponent, Kleeb, has also criticized the package, pointing out that when Newell-Rubbermaid closed its Beatrice plant in 2006, the company offered up to 20 weeks of severance pay.

By forcing employees to apply for unemployment benefits immediately, instead of giving them full severance pay for several weeks first, Newell-Rubbermaid is placing some of the burden of taking care of its employees on taxpayers, Kleeb said in a press release.

“Newell cuts their bottom line, and Nebraskans pay the price,” he said.

That’s not quite true, Joyce said.

Like every company, Newell-Rubbermaid paid into an unemployment insurance fund that’s managed by the state. The money paid to Vise-Grip employees after the plant closes will come out of that fund, he said.

“Employers pay into the unemployment insurance fund through unemployment taxes,” Joyce said. “That is the basis on which benefits become payable.”

Doolittle would not comment on the specifics of the sub-pay package. Even so, he defended it.

“It’s fairly substantial,” he said. “We’re doing everything we can to help employees land on their feet quickly.”

Doolittle would not say whether anyone had offered to buy Vise-Grip from Newell-Rubbermaid, something community and state leaders had hoped could happen.

But even if they had, Doolittle  said, Vise-Grip — a highly recognizable brand — is an important part of the company and not one Newell-Rubbermaid would likely part with.

And while the company wanted to keep Vise-Grip in DeWitt — the same community where the locking-pliers were invented — rising costs has made doing so impossible.

“In the past eight years, during one of the largest construction booms in this country’s history, we saw our sales decline,” Doolittle said.

So the community, the state and various other economic development agencies will keep on looking for something else.

“When stuff like this happens, it’s a priority of ours to try to get another business into a community,” said Sokolewicz of NPPD.

“And there’s also folks over at the Department of Economic Development doing the same thing.”

Reach Cara Pesek at 473-7361 or cpesek@journalstar.com.