Fedco to close factory, fire 52
By JENNIFER GOLDBLATT, Times Staff Writer
ODESSA -- Just six years ago, county leaders were applauding Fedco Systems Co.'s gleaming new factory on Gunn Highway.
They beamed at the company's decision to keep making the machines that squirt creme filling into Twinkies in Pasco instead of expanding elsewhere.
Now, Fedco plans to close its factory and lay off 52 workers.
"We need to consolidate our manufacturing facilities for profitability's sake," said Matt Zielsdorf, Fedco's president and chief operating officer. Fedco's corporate parent, the Peerless Group, plans to combine its operations in Pasco and Chicago with its plant in Sidney, Ohio.
"We've got three buildings to maintain and a lot of overlapping positions."
The Odessa plant, which employs 62, will close in January. Ten employees plan to move with Fedco. The company will offer job-hunting assistance and severance pay to the rest.
Employees were told about the shutdown last month.
The city of Sidney is offering Peerless a 75 percent tax abatement for 10 years to bring its Pasco and Chicago operations there and build a 60,000-square-foot building in an enterprise zone.
Fedco moved to Pasco in 1978. When Peerless bought the company in 1992, it considered moving the Pasco plant back to Ohio. Instead, the company built a 54,000-square-foot plant across the street from its old plant. In 1996, the Economic Development Council honored Fedco as one of its manufacturers of the year.
Last year, Fedco's property and tangible taxes put $32,115 into county coffers.
But in recent years, the company has had trouble maintaining a consistent flow of orders, Zielsdorf said. Last year, orders were down by about $2-million.
Fedco considered staying in Pasco and moving the Chicago operations there. But savings could not compare to the incentives Sidney offered. He said consolidation of the three factories could save Peerless up to $6-million per year.
"With the savings from the consolidation it just makes more sense," he said. The move "has nothing to do with Florida and the county. If we want the company to survive in the next 100 years we need to consolidate our efforts."
John Walsh, existing industry manager for the Pasco EDC, said Fedco had actively participated in the EDC's programs, opened the factory for tours and even talked to companies that were considering a move to Pasco.
"I hate to see them go," Walsh said. "They've been a great supporter of us and a tremendous corporate citizen."
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