Local Business

Red Wing Shoe to close one plant, lay off 200

11/13/2009 9:37:09 AM

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By Brett Boese

Post-Bulletin, Rochester MN

RED WING -- After operating at reduced capacity for months, Red Wing Shoe Co. has decided to downsize because of the recession.

The restructuring process will close the manufacturing facility in Danville, Ky., and eliminate the second shift in the Red Wing plant.

Approximately 200 workers will lose their jobs, including up to 60 in Red Wing.

The plant in Potosi, Mo., is expected to add employees to handle the higher work load.

A year ago, Red Wing Shoe Co. enjoyed a record financial showing. While sales have continued to be strong in 2009, according to company communications director Peter Engel, the prolonged recession forced the enterprise to make an overhaul.

"During the recession, we have been operating our plants at less-than-ideal efficiency through reduced work weeks and occasional shutdowns," Red Wing Shoe President Dave Murphy said via press release. "We were optimistic that the economy would recover sooner than later, however, the continued record unemployment in the blue-collar segment, which is our core consumer base, shows no signs of quick recovery."

The company is expecting to create the same amount of footwear with two facilities operating at full capacity as it did with three functioning at around 70 percent, but costs will be significantly reduced.

Second-shift employees in Red Wing will be offered an early retirement package. Engel expects the proposals to be completed next week. The deadline to accept will be some time in December.

However, the move will also restore the first shift back to full-time status in Red Wing. The local plant had been operating under four-day work weeks since May. Under the Minnesota's Shared Work Program, employees were able to maintain their benefits package while also claiming unemployment on the day they didn't work to receive around 90 percent of their former wages, Engel said.

Red Wing Shoe distributes its products to more than 100 countries, including more than 4,000 dealers in the United States. It opened in 1905.

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