PITTSBURG, Kan. (AP) -- The city of Pittsburg will lose 600 jobs when its largest private employer, wheel manufacturer Superior Industries International Inc., closes its southeast Kansas plant by the end of the year.
City officials were caught off guard by Tuesday's announcement, which the Van Nuys, Calif.-based company blamed on declining demand for the light truck and SUV wheels made in Pittsburg.
Superior has had a presence in Pittsburg for about 20 years, with an annual payroll of $27 million. Its 15-acre plant has a net book value of $13.2 million in manufacturing equipment.
"I foresaw them being around for a couple more years, but I was obviously wrong," said City Commissioner Rudy Draper, who worked at the Superior plant until April 2007.
Draper worked in upper management at the plant for seven years, and said he received several phone calls from friends at the plant after the announcement.
"They thought it would be more gradual," he said. "I think everybody expected it to come, but I don't think anybody expected it to come all at once like this."
Employees were told the shutdown will be phased in, with the first layoffs taking place in late October and the final closing expected Dec. 19.
Including the Pittsburg operation, Superior Industries has about 5,700 employees and operates nine plants in the United States, Mexico and Europe. The Pittsburg closing is part of a cost-cutting plan that will also lay off 65 employees elsewhere and elimination of 90 open positions companywide, resulting in a 29 percent reduction in its U.S. workforce.
Shares of Superior Industries fell slightly on the New York Stock Exchange following the announcement Tuesday.
Superior's chief financial officer, Erika Turner, said the U.S. automotive industry is struggling as consumers shift away from gas-guzzling sport utility vehicles and trucks in favor of smaller, more fuel-efficient vehicles.
"It's hurting our customers," she said, referring to the Big Three automakers, and in particular General Motors. That in turn is hurting suppliers such as Superior, whose Pittsburg plant was "very, very highly focused on GM production," Turner said.
"We do believe this is a permanent shift," she said.
Superior's overall orders have been helped by the growing preference for smaller vehicles, but not enough to offset the loss in Pittsburg, Turner said.
"The volume just isn't there. We have the ability to pick up that volume in other plants," she said. "It is not enough to replace the light-truck and SUV volume that has been lost. We take this step with quite a bit of anguish."
Two Superior plants in Arkansas also make wheels for cars and light trucks. It also has three plants in Mexico, but work is not being transferred there.
"We are not adding labor to Mexico in lieu of Pittsburg," Turner said.
The company will offer severance benefits to employees who stay to the end to qualify. Those who leave early to take other jobs will not get the severance benefits.
In all, Superior expects to incur about $1.8 million in severance costs as a result of the closure.
Employees of the plant generally declined to talk with reporters Tuesday, but workers at a convenience store about three miles away said they, too expect to be affected by the closing.
"For us personally, it's a steady flow of business," said Michael Riley, who has worked at the Snak Atak store for more than a year. "I think it's going to be a pretty big loss for our little store and a bigger loss for the town in general."
Mark Turnbull, Pittsburg's economic development director, said repercussions from the closing will be felt throughout the four-state area of Kansas, Missouri, Oklahoma and Arkansas.
About 450 of the plant's 600 employees live in Kansas, including 260 in Pittsburg, Turnbull said.
Turnbull noted that another major employer in the region -- O'Sullivan Industries in Missouri's Barton County -- closed a year ago, putting 700 people out of work. Located in Lamar, about 25 miles east of Pittsburg, O'Sullivan made ready-to-assemble furniture.
"We feel your pain," Lamar city administrator Lynn Calton said Tuesday of his Pittsburg counterparts.
