Create a free account to continue

New Era Cap Keeping N.Y. Plant, Ala. Plant Closing

Maker of Major League Baseball hats has chosen its New York plant to survive as company’s sole U.S. production facility and will close its Alabama plant later this year.

BUFFALO, N.Y. (AP) -- New Era Cap Co. has chosen its western New York plant to survive as the company's sole U.S. production facility.

Wednesday's conditional announcement by the Buffalo-based maker of Major League Baseball hats means a facility in Demopolis, Ala. will close later this year while the production facility in Derby, N.Y., remains open.

The Alabama and New York plants were put on notice in November that one would go as part of a reorganization made necessary by lower consumer demand.

Both states came forward with economic incentives as the company negotiated the decision with the Communications Workers of America.

"This was an incredibly difficult decision," said Christopher Koch, chief executive of the family-owned company. "In the end, our decision to keep Derby open was based largely on the need to retain our most senior and experienced unionized employees."

The company also said the Demopolis plant, which employs 350 people, would have required extensive renovations to handle its role as the only U.S. production facility. New Era also has operations in Canada, Europe, Japan and Hong Kong.

The news was cheered by New York Gov. David Paterson, whose Empire State Development Corp. offered $3 million as part of a broad package of incentives to retain the Derby plant and its 330 jobs. The company also will get property tax relief and sales tax abatements from the town of Evans and Lake Shore School District and grants for electrical improvements from National Grid, among other benefits.

"I fully recognize that this decision was an extremely difficult one for new Era, with one plant being saved at the expense of another," Paterson said.

The survival of the Derby plant is contingent upon employee approval of a new contract that includes "operational efficiencies and cost savings." A vote is scheduled for Feb. 2.

New Era produced about 6 million caps in the United States in 2009, down from 11 million caps the year before. Most popular are the 59Fifty style, the fitted on-field caps favored by Spike Lee and other celebrities that retail for between $32 and $36.

The company said consumer demand has dropped 10 to 15 percent since the recession began and custom orders have fallen dramatically as independent retailers have struggled or closed.

The restructuring announced in November also includes plans to close a plant in Jackson, Ala. and a Mobile, Ala. distribution center.

More in Operations