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Sources: Sumitomo closure 'in the works for months'; county aims to recapture tax incentives

Union officials are convinced that the plan to shut down Sumitomo Rubber was in the works for months. Sources confirm that suspicion.

TOWN OF TONAWANDA, N.Y. — News of Sumitomo Rubber USA (SRUSA) abruptly shutting down is still difficult for officials at the United Steelworkers Local 135L to get their mind around. 

"It was a gut punch," USW 135L President Joshua Hall said. "For the whole community, this is going to be pretty devastating. We talk about this kind of tax base that's going to be affected."

Town of Tonawanda Supervisor Joseph Emminger told 2 On Your Side on Friday that the closing of the plant could impact town finances to the tune of $450,000. 

Union leaders know the ripple effect will spread to other essential services. 

"It's going to affect teachers, police, officers, firefighters, because that tax base is not going to be there to pay for it," Hall said. 

The timing of the announcement is suspicious for union leaders, particularly after the union has helped the company the past.

"They've always come to us when they've needed help with stuff," Hall said. 

While company officials and statements maintain that the decision was made to shutter the 100-year-old tire manufacturing facility on Tuesday at a board meeting in Japan, sources tell 2 On Your Side that plans for the closure have been ongoing for much longer. 

Sources tell WGRZ that plans to close the plant have been ongoing "for months" and "nearly a year." 

Sources also say that a particular sticking point with upper management at Sumitomo Rubber Industries LTD (SRI), the parent company of the Tonawanda plant, was new sick time laws in New York State. 

Changes to state law mandated employers with more than 100 employees have to give at least 56 hours of sick leave. 

Sources tell 2 On Your Side that the changes created an attendance and performance problem within the plant at a time the SRI was conducting a viability analysis of the facility. 

For many workers, and general observers that have reached out to WGRZ, the timing of the announcement is suspicious as well — many people are tying the announcement to the result of the U.S. presidential election. 

Sources tell WGRZ that the decision was made well in advance of the election, and that "the election and tariffs weren't a factor. The decision was made a long time ago."

Regarding the WARN notice, a requirement under New York State law when a company intends to layoff part of its workforce, Erie County Executive Mark Poloncarz believes the Sumitomo Rubber USA didn't properly file before making their closure announcement. 

"I believe they violated the WARN Act, they can still close, but there will be repercussions associated with that," Poloncarz said on Friday. 

The Erie County Industrial Development Agency provided tax incentives to SRUSA in 2017, the county executive says there is a recapturing clause in the agreement. 

"If they shut down, they do not meet the standard with the number of jobs that they say they were going to create or have as a result of the tax benefit that was provided to them, then they got to pay it back," Poloncarz said. 

The county executive said that he hopes someone steps in to buy the facility. Sources told WGRZ that there were last minute negotiations between Sumitomo and an unidentified company to buy the plant turnkey, but they ultimately fell apart before the decision to close was made on Tuesday. 

"There's nothing we can do to force a company to stay open if they want to close, but we can hold them responsible for the rules and regulations that are in place, like the WARN Act," Poloncarz said. 

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