Regional January 28, 2010 9:30 AM

New Era Cap to Keep Derby Plant, Close Alabama

Buffalo Rising 16

In a decision that will keep New Era local, saving some 330 jobs and creating more, there are still worker concessions to negotiate with union members this coming Tuesday.

Governor David Paterson and Senator Charles Schumer played a large role in keeping the 90-year-old hat manufacturer in WNY with $3 million in Empire State Development assistance and other incentives. The Derby plant, opened in 1960, has employees with seniority over the 12-year-old Demopolis, Alabama plant, but in the shift, new jobs will be created here that Demopolis workers will have first dibs on. This will also allow New Era to recall workers who were previously laid off.

Preceded by the November announcement of an upcoming New Era plant closing in Jackson Mississippi, it was a toss between whether Derby or Demopolis would be the last plant standing, but in the end, the New York incentives outweighed those offered by Alabama.

More details of the incentives offered, details of which are still being hammered out, can be seen in this Buffalo News story by George Pyle.

The final result of keeping the Derby plant open will mean more jobs and the possibility of an influx of new residents from the southern plant closings. As the economy strengthens and consumer demand increases, New Era stands to be a bigger regional economic generator than ever before.

Top Image: New Era founder Ehrhardt Koch in 1924 from the New Era archive.

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Comments

16 Comments Leave a comment

Max

January 28, 2010 10:34 AM

That's great news and a refreshing reversal from the typical story about jobs heading south from WNY or overseas.

I'm heading over to New Era for a new cap and suggest that everybody else does the same!

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rb09

January 28, 2010 10:42 AM

Great news!
330 jobs saved.

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lynnemarie

January 28, 2010 11:40 AM

I'm definitely going to go by a new era cap!

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Allentwnguy

January 28, 2010 11:46 AM

That may be great news for Buffalo but New Era is still eliminating 322 jobs in Jackson Alabama, 70 in Mobile and 355 workers in Demopolis Ala. It may be a win for Buffalo but it’s definitely a loss for Alabama.

Not to mention we as taxpayers are giving New Era a boatload of benefits including 3 million from the Empire State Development Program. They may also get income tax credits, energy efficiency financing, help with property taxes (who couldn’t use that) and infrastructure aid from National Grid.

Now don’t get me wrong it is great they chose to stay in the Buffalo area but this is a business, shouldn’t it be survival of the fittest? Businesses play one city against the other and one state against the other to get ahead. Every time politicians want to get business in the area we the taxpayer have to pay? I don’t know about anyone else but I’m broke. And I am tired of constantly hearing that we are giving taxpayer money to business to stay, businesses to come here and money to businesses to start up and fail. We can’t keep doing this and survive. I know I can’t.

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rb09

January 28, 2010 12:06 PM

Alabama offered significant incentives. It's the way of the wold today. Preserving the 300 jobs is worth the price of the incentives.

The economic incentives offered in Alabama, Koch said, were significant but not enough to overcome the fact that the Demopolis plant would have to be significantly enlarged and upgraded in ways that would be both expensive and disruptive to production. The Derby plant, the CEO said, is larger and in better shape, much more capable of taking on the added workload without disruption

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Really?

January 28, 2010 12:18 PM

The short answer to "shouldn’t it be survival of the fittest?" is no.

If you are upset about being broke, there are lots of spending areas that you should focus on first before you find frustration with incentives to businesses IMHO.

Did you consider the other possible result? 330 people laid off in WNY would have put even more of a strain on your pocket because it is not like there are plenty of jobs for these people to move to if New Era closed. This is before you look at the loss of property taxes for the plant in Derby. Which would be another hit to the economy.

This is a company that has been in WNY for 90 years. I think it is safe to say that New Era has earned the right for a little help from the community it has been a part of.

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flyguy

January 28, 2010 12:55 PM

I hate to say this but until everyone in the world falls under the same monetary system and is on an equal plane with everyone else, where geography and location and raw goods are the only deciding factors I think we will continue to see the USA everyone fondly remembers continue to erode away as it has been. In the meantime be prepared to continually settle for less and work more. With the exception of those at the top with the financial resources and lack of allegiance to any one particular country, state, or city due to making more and more of the almighty buck, everyone is on a fast train racing to the bottom. The poorer the poor and middle class get the richer the greed at the top get and that makes the shareholders "in the in crowd" happy too!

Our retirement investments in the market ride on a roulette wheel when you have puppet masters manipulating the market as they did to drive prices where they felt fit in an effort to make more bank. The only problem is the money lust got out of control and the deck of cards crashed down to everyone's expense. The problem is it hurts alot more at the bottom than at the top.

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sonyactivision

January 28, 2010 11:39 PM

Are you drunk?

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orlanmon

January 28, 2010 3:38 PM

I guess I need to buy one or more New Era Sabres Caps; thanks for believing and supporting WNY.

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whatever

January 28, 2010 4:31 PM

Ideally there'd be no corporate welfare, but $9,000 per manufacturing job sounds better than most well-publicized cases of it here.

$3M for 330 full-time jobs that make products sold elsewhere sounds nowhere near as bad as $81M for Bass Pro ($35M store building plus $46M for parking garages) which will have mostly part-time retail jobs. Gigi's was given $140,000 in BERC grants, and there's no reason to think grants to restaurants create any jobs that wouldn't be here anyway.

Retail businesses mostly just reshuffle $ that would be spent around here anyway. Same with restaurants, hair salons, residential, etc.

New Era's factory makes things sold around the nation and world. That has a lot more local economic impact.

NY state will subsidize Yahoo over $800,000 per job in their data center. Those pay more than New Era, but a $9K/job subsidy for New Era sounds like a much better deal for taxpayers than the $800K/job subsidy for Yahoo.

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Armchair MBA

January 28, 2010 6:22 PM

It is worth mentioning the oft lamented 800k/job for yahoo is pure opportunity cost. The only thing we are doing there is selling hydropower to them at cost not exempting them from taxes or grants.

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whatever

January 29, 2010 12:33 AM

The Yahoo deal is pretty stupid even in the opportunity cost sense, so that's not much of a defense for it. There's no good reason why Yahoo jobs should be worth $800,000 each, so much more than for other businesses receive.

Also, instead of subsidizing a few selected companies, the laws could be changed so their whole mess of a system for pricing and subsidies is ended and Power Authority electricity rates could be lowered for all businesses and residents who buy it. That won't happen but it should. Customers of Power Authority electricity are paying higher prices than they'd need to be in order to allow generation of the far-below market rate electricity for Yahoo (and other things Power Authority $ is used for).

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Armchair MBA

January 29, 2010 8:21 AM

I agree with you that it would be better to reduce rates accross the board to reflect the low cost of production @ the Niagara Power Project. From what I understand, they can generate power for dirt cheap but most of us pay "market rate" because electricity is much more expensive to produce in other plants.
That being said, selling that cheap power at cost to attract businesses is better than selling it for profit that nobody in WNY will see. I think they ought to do this for companies that promise to create a higher ammount of jobs than the yahoo facility but nys may have felt pressure to get the deal done after the google flub.

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sonyactivision

January 29, 2010 10:22 PM

Intel spends as much as $10 billion on its semiconductor facilities, none of which comes from taxpayers. If one of those plants employs 3,000 workers, are those jobs worth $3,000,000 each? Retarded argument from you.

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whatever

January 30, 2010 12:07 AM

I didn't say anything at all about Intel. A semiconductor factory is very different from a data storage center.

I made the point that all jobs aren't of equal merit for subsidies (which apparently you agree with), and opined that Yahoo data center jobs aren't worth $800K of public subsidy each.

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replied to sonyactivision

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STANCSEA

January 29, 2010 6:26 AM

My thoughts and prayers go out to those people in Mississippi and Alabama who will be losing their jobs. This is not good news for anyone, including those in Derby.

To celebrate keeping your job while three other people lose theirs is sick. This is another example of a company pitting workers against workers while management gets rich of the fruits of their laborers.

I only wish that President Obama could have stepped in to save all of these jobs. That would be a winning scenario in my book.

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