HomeMy WebLinkAbout12-10-2010 Statement from Mayor Luecke on A.J. Wright closing
Office of the Mayor
NEWS RELEASE
December 10, 2010
2 p.m.
Statement from Mayor Luecke on A.J. Wright closing
Contact:
Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564
This morning, my office was informed that TJX began taking steps today to consolidate
its A.J. Wright division and close the A.J. Wright Distribution Center, 1902 W. Sample
St., eliminating what corporate officials say are between 650 and 750 jobs (although the
most recent figure provided to the City a year ago was the equivalent of 531 full-time
jobs).
TJX will close the Sample Street building “in the next couple of months or so depending
on the amount of inventory available on site,” according to Jerry Rossi of TJX, which is
based in Framingham, Mass. Divisional executives in South Bend were not involved in
the decision-making process and were not informed of the decision until last night. TJX’s
national news release indicates the company expects actions to be completed in the first
quarter of 2011. In addition to the South Bend facility, which opened in 2004, a similar
A.J. Wright distribution facility of about equal size is closing in Massachusetts as well as
A.J. Wright’s home office. The corporate office said about half of the jobs cut overall are
part-time, and some jobs here in South Bend were temporary.
More than 80 percent of employees at the South Bend distribution center live in South
Bend. According to company officials, the local workforce has been roughly one-third
Hispanic, one-third Caucasian and one-third African-American. This is a sad day for our
friends and neighbors who are impacted by these business decisions. The facility had
been hiring recently, and it was providing good jobs with healthcare and other benefits.
Our community provides good resources for employees dealing with job transition, and
we hope that other opportunities could soon be available.
A silver lining in this disappointing news is that the 540,000-square-foot facility, with
room for a 300,000-square-foot addition, could provide a ready site for another
distribution center. This modern facility, opened in 2004, is very adaptable: A clear-span
building with tall ceilings and lots of loading docks. In recent weeks, our economic
development staff have been meeting with two companies, which each have been looking
for a facility of about this size in South Bend. We hope to engage these companies in
conversation about whether this facility would be appropriate for their needs.
There are provisions in place that will allow the City to collect other penalties to recoup
some of the public investment that was made in this project. These penalties are based on
the failure to meet targeted jobs, which were to rise to 857 jobs in Phase 2. The
contracted period extends through 2019. Those penalty amounts are not available at this
time and will need to be calculated based upon what actually happens.
I can report that since 2005, TJX has paid tax penalties for not meeting job targets here in
South Bend. In its most recent report from March 1, 2010, TJX paid a $27,600 penalty
because its 531 jobs on Nov. 30, 2009, were 126 jobs below the 657-job target. Including
the most recent payment, TJX has paid $410,780 in job-target penalties since 2005.
This consolidation nationally involves cutting 4,400 positions, includes the conversion of
91 A.J. Wright stores to other TJX brands – such as T.J. Maxx, Marshall’s or
HomeGoods stores – and the closing of 71 other stores. Almost half of the positions
expected to be cut are part-time. TJX has about 154,000 employees companywide.
There is not much a community can do when a company decides for business reasons to
close an entire division or brand, as TJX is doing with its A.J. Wright division. South
Bend’s location provides a key advantage when compared with other communities as a
site for distribution centers. Our economic development staff will highlight that strength
as they market this excellent facility and location to other potential users.
# # #