Dexter Shoe closing final Maine plant; Foreign competition blamed

This story was published on Sept. 19, 2001 on Page A1 in all editions of the Bangor Daily News

DEXTER – Bob Grant planted his hands on the countertop in his small Dexter Variety Store on Spring Street, shook his head and said he didn’t know what the world was coming to.

First the terrorist attacks in New York and Washington, D.C., and now a more direct hit locally with Tuesday’s announcement that Dexter Shoe Co. would close its factory in this Penobscot County town of approximately 5,000 residents.

“It’s scary, the whole world’s changing in front of us so fast,” Grant said Tuesday, as he counted out change to a customer.

The company’s announcement to cease operations at its remaining manufacturing plant in Maine and to reduce its workforce by about 475 from Nov. 1 through January is a major blow to eastern Maine’s economy as well as the workers.

Roger Ronco of Sangerville, who has worked at Dexter Shoe as a utility man for 37 years, said Tuesday he expected the announcement but was still disappointed. Ronco, 55, said his wife is unemployed and that he has been fighting Parkinson’s Disease for the past two years. That’s two strikes against him, he suggested. “We’ll just take it one day at a time and hope the good Lord will take care of us,” he said.

A statement from Dexter Shoe management said the company plans to continue warehousing, customer service and other administrative operations in the state and will continue to run its chain of factory stores in Maine. The closure does not affect the operation of the company’s factories in Puerto Rico and the Dominican Republic.

Founded more than 40 years ago, Dexter Shoe Co. is a leading footwear brand specializing in men’s and women’s shoes.

Some local officials had been expecting such an announcement in the wake of plant closings by the company in other Maine locations, including Milo and Skowhegan in the past few years.

“It [the closing] certainly has been rumored for quite awhile,” Sen. Paul Davis, R-Sangerville, said Tuesday. “The news is devastating.”

In fact, a Dexter Shoe official confirmed Tuesday that company officials had contemplated ceasing its Dexter operation for some time. “We planned to communicate this decision last week, but in light of the tragic events, we postponed the announcement until today,” company spokesman Stephen Lewis said in a prepared statement Tuesday.

Lewis said the company was grateful and proud of its workforce, but could not control the worldwide marketplace and global economy.

In a matter called unrelated to the closure announcement, the NEWS learned Tuesday that Dexter Shoe Co. is consolidating its operations with H.H. Brown Shoe Co. of Greenwich, Conn. Both companies are owned by Warren Buffett. The extent of that consolidation has not yet been defined, Lewis said.

Dexter Shoe’s announcement pushed the state to an all-time record high in the number of job dislocations in a year, according to Kate Bragan, spokesman for the Department of Labor. Businesses as diverse as Jordan’s Meats, EnvisioNet, and International Paper lumber mills had previously announced job cuts or closures this year.

Gov. Angus King plans to meet with shoe company officials at 1 p.m. and with municipal officials at 2 p.m. today.

“This is obviously terrible news,” King said Tuesday, in a prepared statement. He emphasized that company officials told him that the decision to close the Dexter facility and reduce its workforce has nothing to do with the quality of Maine’s workforce, nor is it a poor reflection on the state’s business atmosphere. “The reality is that overseas competition is making American-based shoe manufacturers an endangered species,” the governor stated.

King and Bragan said the Department of Labor will be sending its Rapid Response Team to help the employees get the retraining they need so that another company will be able to benefit from their expertise and work ethic. That team is expected to meet with company officials later this week.

The team will provide workers information about unemployment, retraining and career opportunities, Bragan said. The Dexter plant is certified for the trade adjustment assistance program, a federal program created for workers whose jobs are eliminated because of increased imports, she said. This program will provide workers with additional training and extended income benefits.

“It certainly will have a substantial impact on Dexter and the surrounding communities,” Bragan said, of the company’s announcement.

That loss will be felt immensely by the town because the company represents 11 percent of Dexter’s tax base, according to Town Manager Robert Simpson. He said the company’s property and personal property is valued by the town at $15 million. Tax bills were mailed out this week to residents.

“I’m sure every aspect of life in Dexter is going to change at least for the near term,” Simpson said Tuesday. “We’ll get through this initial shock and we’ll do okay.”

Simpson said that he recognized the company had to do what it must to survive economically. “In many cases, we’ve legislated ourselves right out of the country,” the town official remarked. He said he sensed that the company was having difficulty, but the “vibrations” were that a downsizing was in order.

The important pieces now, Simpson said, is to make sure that the employees get the help they need and to generate more economic opportunities within the community. He hoped that company officials will work with the town to find a business tenant for the building as they did in Milo. JSI store fixtures now operate out of the Milo plant. “My worst fear is that the building will be boarded up but I know that’s not going to happen,” he said.

The town manager said he would convene a special meeting of the municipal economic development committee this week to explore the issues and brainstorm ideas for a later meeting with state and local officials. He also expected the town council will hold a special meeting this week to discuss the matter.

Although the news is devastating to employees, Simpson said there are opportunities that will arise from the closure. “I see an opportunity that we will have some excellent facilities available in the near term for regional industry that’s expanding or modernizing. We will try to play that card and I think it’s a card that will work to our advantage,” he said.

State and federal representatives will be working with the town to help lessen the impact.

U.S. Rep. John Baldacci, and Sens. Susan Collins and Olympia Snowe called for swift action on behalf of the workers who will be affected by the closure.

“Many families will feel the effects of these layoffs by Dexter Shoe Co.,” Baldacci said. “I want each of them to know that people care about their situation, and will do everything possible to lend a hand.”

Snowe said, “I am deeply saddened by Dexter’s announcement that it will end its Maine operations. Dexter Shoe Co. has provided good, traditional manufacturing jobs to hundreds of workers in our state, but has suffered the effects of foreign competition that have reduced the workforce in recent years.” She said she hoped that the Trade Adjustment Assistance program, which has been in place since 1999 for Dexter Shoe workers, will quickly retrain the workers in new fields and assist the communities in returning to normal.

“It is imperative that the United States Department of Labor assist these workers in finding new jobs by providing funding to establish a transition center and by extending certification of the employees’ Trade Adjustment Assistance,” Collins stated in a prepared statement.

In addition to the help offered by state and federal agencies, the Piscataquis Economic Development Council has pledged its support and assistance. Warren Myrick, council president, said many people from Piscataquis County are employed at Dexter Shoe.

“We’ll assist them in whatever way we can,” Myrick said. He said the town will now have a labor force that can be trained and retrained and will have a building available. Eighty percent of businesses looking to relocate or expand want an existing building, he said.

Regardless of the future, the closure of Dexter Shoe Co. will have a rippling economic effect throughout the community, according to state and municipal officials.

School officials in the region will likely be faced with an even greater declining student population than anticipated if the plant is not occupied soon by another large manufacturer. Prior to the announcement, the decline in enrollment was so great in neighboring SAD 4 in the Guilford area, where many of the affected workers reside, that school officials started the process of closing three elementary schools.

In addition, SAD 46 directors from Dexter, Garland, Ripley and Cambridge will convene a special meeting this week to discuss the future of a planned $575,000 minor capital improvement referendum set for Nov. 6. “We felt we really needed to discuss the bond referendum in light of today’s announcement,” SAD 46 Superintendent Les Butler said Tuesday.

Local businesses too, are assessing the future and the need to adjust. “I’m kind of nervous about it,” said Grant, the variety store owner. He expects his business, which is a few blocks away from the Dexter Shoe plant, will suffer. He said company employees are his regular customers and that the executives at the plant keep a running monthly tab of about $200 for food items. Grant, who once worked for the shoe company for 15 years, expects he will have to lay off some of his nine employees.

“I feel sorry for a lot of people down there who’ll find it difficult to find another job [because of their age],” Grant said.

Despite the gloomy outlook, town manager Simpson, a retired military officer who lived through two base closings in his career, said Dexter will not become a ghost town. “There won’t be any tumbleweeds blowing through town, we’ll prevail and we’ll do it well,” he said.

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