Company buying Erwin plant closed Hoover plant 10 years ago; mayor says company now 'different, stronger'

Nathan Baker • Updated Jul 15, 2017 at 11:24 PM

The company buying an Erwin bearing manufacturing plant closed a similar facility in the town 10 years ago and laid off its 80 workers.

But Unicoi County Mayor Greg Lynch believes things will be different this time.

Lynch said he understands why some people are concerned with Tsubaki Nakashima’s pending purchase of the NN Inc. ball and roller plant, especially after the company closed Hoover Precision Products in 2007, but he said Tsubaki Nakashima has matured and grown since then.

“When we had our first dealings with them, they were a young company, and still finding their way in the world,” the county mayor said. “Since that time they’ve gotten bigger. They’re listed on the Tokyo stock exchange now. I think and I hope that we’re dealing with different company, a stronger company.”

According to Tsubaki Nakashima’s website, the Japanese company bought Hoover’s steel ball division in 1990.

In 2007, the company closed the 50-year-old Erwin manufacturing plant and a similar facility in Connecticut, and consolidated them to Cumming, Georgia, the site of a third plant. At the time, corporate representatives said the company had too much production space for its market.

The last of the production employees left Hoover’s Jonesborough Road plant by October 2007; managerial staff were gone by the end of the year.

Alan Keesecker was one of the last Hoover employees at the shuttered factory. As a shipping clerk, he watched the last order roll out.

“It was a sad day in my book,” he said.

Though a strike at the unionized Hoover plant a few years after Tsubaki Nakashima bought it left a sour taste in employees’ and the new owners’ mouths, Keesecker said the Japanese company was good to work for.

When the company announced the closure of the Erwin plant, he said the 80 or so employees felt blindsided. The Erwin plant led the company in production and quality measures, they’d been told, so closing up shop was the last thing they expected.

For a few weeks after the closing, Keesecker filled in for employees at the Cumming, Georgia, plant, but he returned to the area shortly thereafter.

He now works at Holston Army Ammunition in Church Hill, and said he wishes Tsubaki Nakashima and its employees the best.

“I think it sounds like a good thing,” he said of the sale. “I hope maybe they increase business here.”

Lynch, who was county mayor when the plant closed, said he knew the 10-year-old wounds from the layoffs were still fresh in the minds of some of his constituents.

“Anyone worked at Hoover when this came down is going to be leery of this,” he said of Tsubaki Nakashima’s purchase of the NN Inc. facility. “But from a standpoint of leadership and economic development in Unicoi County, we’ve got to keep an open mind that this is something they’re going to expand on. I don’t see them just coming in and paying all that just to shut down an industry.”

NN Inc., headquartered in Johnson City, and Tsubaki Nakashima announced the $375 million transaction last week. Tsubaki Nakashima will own all the plants associated with NN Inc.’s precision bearing components group, including the plants in Erwin and Mountain City.

In an email Tuesday, Tomoya Soda, investor relations manager for Tsubaki Nakashima, said the two plants will remain open as they are and no layoffs are planned.

“We believe both new plants will contribute to our corporate strategy of ‘Further profitable growth,’” Soda wrote.

Northeast Tennessee Regional Economic Partnership CEO Mitch Miller said Tsubaki Nakashima will open its North American headquarters in Johnson City, alongside NN Inc.

“We are excited to welcome (Tsubaki) Nakashima Co to Northeast Tennessee and look forward to working with them to grow their North American presence here in our Region,” Miller said in an email.

Before NN Inc. announced the sale, the company was in talks with Unicoi County’s Joint Economic Development Board to build a new bearings plant on Dry Creek Road to replace the existing facility near the county high school.

Officials failed to secure a $500,000 state grant to buy the land, but were putting together a package of incentives to keep the jobs in the county.

Lynch said last week he’s still open to working with the new owners to expand their manufacturing presence in the area.

“We’d want to look at the same thing with Tsubaki Nakashima, we’ll put the same components in place,” he said. “We hope to be able to work with them on the land we have the option on and other land that may be about to open up here in Unicoi County.”

The mayor said he doesn’t believe the company will close the Erwin plant, because they would be leaving behind the skilled and trained workers who’ve been making bearings for years.

“I think it would be hard for them to come in and pull away from a workforce as skilled as this and take those jobs somewhere else,” he said. “That’s an important resource a lot of companies are struggling with these days.”

The spring following the closing, Hoover, owned by Tsubaki Nakashima, exercised an option in its lease and bought the 171,000-square-foot manufacturing facility, paying Unicoi County $2,400 and Erwin $1,200 after sending the town a check for $47,400 in owed rent.

More than a year later, the company sold the building and the 15 acres of land it sat on for $825,000 to Marotta Enterprises, owned by John Marotta, an Erwin resident.

Marotta split off acreage and sold roadside outparcels to Pal’s, Taco Bell and Bojangles’ restaurants, but the large manufacturing building remains empty.

Last year, Marotta tried to sell the remaining 14 acres to the town for $1.5 million, but the Board of Mayor and Aldermen declined to pursue the sale.

Johnson City Press Videos