A manufacturing company that Idaho officials recruited to much fanfare in 1994 announced on Thursday it will close its Post Falls site within two years, laying off 260 workers.
Kimball International, which moved a California operation to Post Falls 20 years ago, plans to save costs and improve its product line by moving the jobs to three of its Indiana factories. Another factor is a significant tax incentive from Indiana, company officials said.
The layoffs will take place in phases over the next two years, said company public relations director Marty Vaught.
Idaho officials in 1994 announced that Kimball would open a desk and office furniture factory in a new building in Post Falls, creating 400 well-paying jobs. The company came because of close to $1 million in training incentives provided by the state of Idaho and raised by Jobs Plus, a North Idaho economic development group focused primarily on luring California companies to the tax-friendly Gem State.
Helping seal the deal was an offer by North Idaho College and the Community Colleges of Spokane to train workers in furniture construction and metal fabrication before Kimball moved into Post Falls, said Bob Potter, who headed North Idaho economic development group Jobs Plus at the time.
The Post Falls site was first called Harpers, after the product brand that Kimball acquired and relocated to North Idaho. Later the plant was called flexcel, and later morphed into Kimball International.
Potter, who retired from Jobs Plus several years ago, said Harpers was the largest company recruitment in Idaho up to that point.
In 1995 Kimball’s first group of North Idaho workers moved into a new 440,000-square-foot facility on 30 acres of land donated by a private developer.
Potter said the loss of Kimball is ironic, coming the same week as an announcement that Post Falls would get more than 70 jobs when a Spokane Valley manufacturing company, Advanced Thermoplastic Composites, moves to take advantage of a new Idaho tax incentive program.
“That’s the way things work,” said Potter, when he learned that Kimball’s relocation to Indiana resulted in part from an offer of up to $1 million in tax credits and up to $300,000 in training grants based on the company’s job creation plans.
Vaught said the primary reason for the closure of the Idaho site was to consolidate production in Kimball’s Midwest and Eastern U.S. factories. Kimball has 17 plants in several states including Indiana, Kentucky and Virginia.
The Post Falls site is Kimball’s predominant maker of metal commercial office furniture, including desks, shelves and pedestals.
Because the majority of its commercial customers are east of Denver, the company was seeing higher freight charges for the Post Falls site compared with other factories, Vaught said.
Additionally, the company was seeing customers move away from all-metal furniture to mixed-component furniture, combining wood with metal, plastics and fabrics.
“Our product line had to adapt as our customers look for more customizable products, not just purely metal items or items with metal-only finishes,” Vaught said.
“So this (decision) is purely about economics,” he added, saying “it does not reflect at all on the great workers we have (in Post Falls) or the quality of their work.”
The majority of the jobs to be cut will be manufacturing workers, including welders, operators and metal fabricators. Other jobs there range from engineering positions to support staff.
The layoffs will be done gradually to minimize the impact on Post Falls and on company customers, Vaught said.
In addition to severance payments for laid-off workers, Kimball will offer job retraining for those wanting to relocate to another Kimball location. Employees will need to apply for open positions in order to be transferred, Vaught said.
“We want to be a good citizen and not leave a bad taste behind,” Vaught said. Kimball plans to work with other companies in North Idaho and Eastern Washington to assist its workers find employment, he said.
Vaught said the company will sell the building at some point, but was not ready to list its price.
Potter said the facility built by Kimball is one of the best production sites in Idaho. “They will find a number of companies who will be interested in taking over that building,” he predicted.