Local Officials Vow

A Determined Fight

To Keep Plant Here

By DOUGLAS WATSON

Managing Editor

American Greetings Corporation announced Monday afternoon that it may end its operations here.

The Cleveland, Ohio-based manufacturer of gift wrap and greeting cards said it will conduct a study to determine whether the manufacturing and distribution plants in Greeneville and those in Kalamazoo, Mich. can be consolidated, which could result in the closing of one of the plants.

Following is the full statement from American Greetings' corporate headquarters:

"As part of its ongoing cost-out initiatives, American Greetings Corporation (NYSE: AM) will continue to look for ways to streamline its supply chain to make it more efficient and effective.

"As part of these efforts, a feasibility study will be conducted to determine whether the manufacturing and distribution operations in Kalamazoo, Mich., and Greeneville, Tenn., can be consolidated -- and if so, where operations should be located.

"The study is expected to be complete and a decision made in early fall 2008. A possible outcome of the study may be the closing of one of the two facilities.

"The Kalamazoo facility manufactures and distributes DesignWare party goods.

"The Greeneville facility manufactures gift wrap and trim, and distributes seasonal gift wrap, trim, holiday boxed cards, and DateWorks products.

"Over the last few years, the company has re-balanced these product lines to address changing market conditions."

The American Greetings announcement continued by quoting Mike Goulder, senior vice president, for the company's operations, as saying, "In determining whether the operations for these product lines can be consolidated, the feasibility study will consider a variety of market, operational and cost factors.

"Our associates at both facilities are dedicated and capable. Many of them have been with us for several years. We are aware of the uncertainty this situation creates in each location. We intend to provide accurate and timely communications to our associates throughout the study."

American Greetings Corporation describes itself as "one of the world's largest manufacturers of social-expression products."

Along with greeting cards, the company's product lines include gift wrap, party goods, stationery, calendars, ornaments and electronic greetings.

Employment Levels

The employment level at American Greetings' local facilities fluctuates considerably every year.

Currently, American Greetings' main plant and an auxiliary plant on Bohannon Avenue have approximately 700 employees, according to Patrice Sadd, American Greetings' corporate communicatons director in Cleveland, Ohio.

However, she said, that when the peak production season ends in November or December, American Greetings' employment normally would decline to about 300 personnel until the peak season resumes in the spring.

American Greetings generates annual revenue of approximately $1.8 billion.

Scott Crawford, general manager of the company's Greeneville plant, said Monday he was not authorized to have any public comment.

Local Leaders React

Local leaders expressed surprise and disappointment at the American Greetings announcement, but also their determination to work hard to convince the company to keep American Greetings operating here.

Greene County Mayor Alan Broyles and Greeneville Mayor-elect Laraine King, who was to take the oath of office this afternoon, each said they will work to keep the American Greetings plant operating here.

Mayor Broyles said he was "shocked" to learn Monday of American Greetings' plans. He said closing of the American Greetings plant in Afton "would be devastating to Greene County and to the work force."

The county mayor added, "We've got to do everythng we can possibly do" to persuade American Greetings to keep its local plants operating and, perhaps, expand its operations by adding work here now being done at its Kalamazoo plant.

Greeneville Mayor-elect King said she and other local government and business leaders "will start working immediately" in an effort to keep the American Greetings plants here open. "All the local officials need to get together on this," she said.

King said it is very important to keep the American Greetings plant operating here, adding, "We don't need to lose more jobs."

Randy Harrell, president of the Greene County Partnership, said, "The decision to consolidate (American Greetings plants) was made by company officials due to a decline in gift wrap sales and as a way of cutting operating expenses."

Harrell continued, "As in the past, when the company was considering consolidating in Franklin, Tennessee ... every possible step will be taken by local and state government officials to convince the company to consolidate in Greene County ...

"In the near future, the Partnership will assist the city and county in establishing a 'community action team' to prepare a package for their (American Greetings) consideration."

Previous Challenge

In April 2004, American Greetings announced it was considering closing either its Plus Mark plant in Franklin, Tenn., or its plants here.

This community then weathered a half-year of anxious suspense as a major effort was mounted locally to persuade the corporation to expand the Greeneville operation rather than close it.

On Nov. 9, 2004, American Greetings announced that it would close its Franklin plant and move that facility's operations and some of its personnel to Greeneville.

Kurt Schoen, then Plus Mark's president, said, "When the cost and benefits were examined, we determined that a Tennessee manufacturing presence was appropriate and that the Greeneville facility would be a more efficient location."

Since then, the parent company has invested more than $5 million in its Greeneville plants and substantially reorganized the layout of equipment within them.

Asked whether American Greetings plans to keep operating in Greeneville, Crawford, the general manager, said in July 2006 he wouldn't have accepted the offer to manage the local plants if he didn't believe so.

Speaking of American Greetings' top executives, Crawford said then, "I think they have confidence in this facility."

For more information on the company, visit www.corporate.americangreetings.com