Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 12, 1995 TAG: 9510120027
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE: LENGTH: Long
The announcement came as a surprise to local officials, who were expecting Sara Lee to expand the plant's operations and work force.
Workers sensed change was afoot before they learned of their fate Wednesday. Some, like employee Tonia Elliott, assumed bad news was coming, but was surprised to get the layoff notice so soon.
"I didn't think it would come so fast," Elliott said as she left the plant at 1100 Intervale Drive.
Elliott was considering taking a comparably paying job at a company plant in Florence, S.C. Sara Lee said it has such jobs there for all interested Salem employees.
There was no immediate word on how many workers will accept the offer, which includes a $1,500 relocation allowance.
"I don't want to start all over again at the bottom pay level," Elliott said.
Senior executives came from Sara Lee's hosiery division headquarters in Winston-Salem, N.C., to give workers the news of the closing. It was, in the words of plant manager John Higgins, "not a pleasant day."
The Salem operation is more than 20 years old and part of Chicago-based Sara Lee for about 11 years. Before that, it was part of Save-a-Stop, a national operation which distributed non-food items such as health and beauty aides, stationery and hardware to supermarkets. A few Salem employees have worked there from the start.
The company refused to grant interviews with workers inside the plant. Two of three employees interviewed outside the plant said they will not relocate with Sara Lee and instead will look for different work in the Roanoke Valley.
"I just don't want to move to South Carolina," said Debbie Smith, a stocker. She said many of her co-workers would agree.
Employee Elaine France, who is assigned to the warehouse, said she was pleased workers will receive severance checks equal to one week of pay for every year of service, and that the company will keep employees on the health care insurance plan at no extra cost to them for at least three months after the shutdown.
The $1,500 moving allowance is available to all workers who move for work-related reasons, whether or not their new employer is Sara Lee. On top of that, the company said it will pay $1,500 per employee for retraining.
"They've really stood by us," France said, "and will continue to do so."
Sara Lee is restructuring production for the nation's $2.6 billion women's hosiery market, of which the company claims to have a 47 percent share. Sara Lee produces girls' and women's hosiery under the L'Eggs, Hanes and Just My Size brands.
Its manufacturing plants have historically knitted, sewn and dyed the pieces, performed finishing and packaging operations and shipped the finished goods to distribution centers like the one in Salem.
In Salem, employees complete final packaging steps, if needed, pick goods from storage shelves as orders arrive, and load them onto trucks for shipment to department stores, supermarkets, drug stores and other retailers along the East Coast from Maine to Florida.
The company decided that it was an inefficient system and that money could be saved by dyeing, finishing and packaging the goods only after orders come in.
"We're going to have much less finished inventory sitting around," said spokeswoman Nancy Young from Florence.
Salem officials had been under the impression Sara Lee intended to add dyeing and finishing equipment at its local warehouse, a move which would have added an estimated 75 workers.
But then, Sara Lee's Young said, "it dawned on us we were trying to move dyeing equipment and packing equipment into a distribution center in Salem when we could flip-flop that and leave the dyeing and packing in Florence and just add racking and what was needed to turn that into a distribution center."
Those advantages more than offset any disadvantage of moving warehousing and distribution from Salem's more central location within the eastern United States, she said.
About 350 people work at the Florence location were Salem employees will have jobs waiting for them next year if they choose. The positions in Florence, a community of 33,000 with living costs comparable to those in the Roanoke Valley, will pay close to the same wages workers receive in Salem, Young said.
Higgins confirmed that many employees receive $7 to $8 hourly but declined to release specific figures for all pay levels.
Sara Lee is a worldwide manufacturer and marketer of baked goods, other grocery products, apparel and accessories and household and personal care products. It employs 146,000 and reported profits of $804 million on sales of $17.72 billion in its most recent fiscal year ended July 1.
Its other operations in Western Virginia include knitwear mills in Martinsville and a regional headquarters in Salem of PYA/Monarch Co. Inc., a distributor of food service products.
Staff writer Shannon Harrington contributed information to this story.
by CNB