Tri-Tube going out of business after 33 years

ABINGDON, Va. – With parts spread across his desk, Art Porter holds up a manifold door assembly: this is the one on which he’s spent his career. In about two months, that career will end.

Porter told his 75 employees Friday that his company, Tri-Tube, Inc., will close in late April or early May – as soon as the final orders have been filled.

“It would take an act of God to save these jobs,” said Porter, who explained that his company simply has no more customers.

“There’s nothing different going on here than has been going on all over the country.”

Made in America

Porter, a Coeburn native, left Southwest Virginia, in 1965 because there were no jobs. He joined the Army and then took a job in Detroit, where he started his first business.

In 1977, he came back to Southwest Virginia and started Tri-Tube. At its peak, the company, a tube fabrication supplier, employed more than 160 people.

Now, more than three decades after it opened, Tri-Tube is getting ready to close because there is no work.

The company has lost one customer after another in recent years, Porter said, as the industries it supplies have moved production overseas – first to Mexico, then to Brazil, then to China.

Each time he’d find a new customer, he’d spend hundreds of thousands of dollars to retool, only to see them leave a few months later. Finally, he got tired of pouring money down a hole.

“We’re not going out of business because of this recession,” he said. “It’s global competition, and that’s been going on for several years.”

The final nail in Tri-Tube’s coffin came March 1, with a letter from A.O. Smith, the company’s last and best customer, which plans to start making all of its water heater components in-house in Johnson City, Tenn.

Luckily, said Porter, the work isn’t going overseas – and while jobs are being lost here, it will help someone else in America stay on the payroll.

“I’m 64 years old, and I remember back when I was a young guy, through high school in the ’50s and ’60s, how hard it was then to get jobs in this area,” he said. “I get the feeling that I’m back in that era, in that type of an environment economically speaking, only this time we can’t go to another part of the country and get a job.”

Tougher and tougher

Mark Petrarca, senior vice president for human resources and public affairs at Milwaukee-based A.O. Smith, said his company is trying to stay competitive so it can keep its American manufacturing jobs.

“It was just a decision to try to manage our costs more appropriately,” Petrarca said of A.O. Smith’s decision to start making the assemblies in-house instead of buying them from Tri-Tube. “We found a way that we could actually get the product into our water heater that was manufactured by this facility at a cost that’s lower at comparable quality levels.”

A.O. Smith’s Johnson City plant employs about 1,150 people; another plant outside Nashville employs about 1,200. The company also has three smaller facilities in Tennessee.

Petrarca said while some products can be made overseas and shipped to the United States, it’s not cost-effective to do that with water heaters – so the water heaters used in North America are made in North America.

Still, he said, the market is very competitive – and certain government policies, like tax rules and environmental regulations, put U.S. manufacturers at a disadvantage in competing with their foreign neighbors.

“When you think about how much U.S. companies spend on compliance … we really do have to ask the question: Are we basically complying ourselves to the point that we’re not going to have any manufacturing in the U.S.?”

He said the economic downturn is also hurting manufacturers – but he’s hopeful many of them will be able to bounce back from the recession as the economy improves.

Empty factories

Porter said when his plant closes, that will make seven empty buildings in the Washington County Industrial Park.

Half a dozen other facilities have shuttered there in recent years. He believes more are likely to follow.

He knew Tri-Tube would have to close eventually, he said – he saw it coming a decade ago, when his customers started looking overseas.

“The recession is probably a result of what’s been going on the last 15 years,” he said. “They’re [manufacturers] just trying to hold onto what they have where they are.”

Bruce Kravitz, CEO of the Southwest Virginia Alliance for Manufacturing, said the loss of manufacturing jobs in the region is not as bad as it appears – and not every factory building is empty.

Even though some companies are closing, Kravitz said, others are expanding or calling back workers who were laid off because of the recession.

Although he had no numbers on jobs resulting from expansions or workers who have been called back, he did cite 2008 figures that the manufacturing sector provides a fourth of Washington County’s jobs and pays 56 percent of its wages.

The Bristol Herald Courier reported in January that at least 2,900 workers in the region had lost their jobs in 2009 – and 6,200 jobs had been lost in the Bristol-Kingsport metro area between December 2007 and November 2009.

No bailouts

“It’s a tough thing telling those people they’re no longer going to have a job,” said Porter, whose company pays an average wage of $10 to $12 an hour. “The hardest thing I ever did was tell those people that they weren’t going to have a job.”

But even as he plans to shut down his factory, he’s proud that he’s never taken – or asked for – money from the government. He said he doesn’t believe it’s right to take handouts – because somebody always has to foot the bill.

He’s especially critical of the big bailouts given to failed businesses in other parts of the country – though his son, Shane Porter, recalled something he’s often said about the nation’s three big automakers.

“I’ve always heard Dad say the saying up North was, as the Big Three go, so goes the rest of the country,” said Shane Porter. “Well, it seems to be that way, the Big Three being Ford, GM and Chrysler.”

Art Porter said he and his children will be OK after the plant closes, but he’s worried about how his employees are going to make it. Some are the best in the world at what they do, he said – but with manufacturing on the decline, it could be hard for them to find another job doing it.

“I’ve been here 23 years, and it’s a total shock to me,” Rick Hamm, a supervisor at Tri-Tube, said of the announcement. “I’m just kind of at a loss about what to do next. In our area, there’s not a lot to do. I think that’s about how everybody here felt. ... Most of them have no idea what to do because there’s just nobody hiring.”

Pam Ratliff, an assembler at the plant, said she worked at Buster Brown in Chilhowie, Va., before it moved to Honduras. After that, she worked at Dana Corp., and when she was laid off there, she came to Tri-Tube, where she’s worked for six years.

“You go through it two or three times, you just get numb,” Ratliff said. “You just wish something would stay here.”

Another production worker, Pam Locklear, said she’s still hopeful something will change before the plant closes.

“There’s always hope,” she said. “If you don’t have hope, you don’t have nothing.”

dmccown@bristolnews.com | (276) 791-0701