May 13, 2022

Possible factory closure reflects bleak outlook for domestic halogen bulb production | News

LOGAN — Due to federal policymaking and a shrinking market, a company that acquired a Logan manufacturing plant nearly two years ago could shut down operations.

Savant Systems Inc., a Massachusetts-based company specializing in “luxury whole-home automation,” acquired GE Lighting in July 2020, Ben Sabol, a spokesperson for Savant, told Logan Daily News in March.

On March 14, Learned announced to employees its “intent to close” the GE Lighting Glass Plant in Logan, 12680 OH-93, which manufactures “glass for linear fluorescent tubes”; as well as its plant in Bucyrus, Ohio. The Logan plant employs 50 people; Bucyrus, 150. Factories would close around September 30.

Pending union negotiations, Sabol said, within the next 45 days (roughly March 14 to April 28), a decision would be made on whether or not to close the gates of the Logan plant — a period called “decision bargaining.” “. From there, the union will negotiate the “negotiation of effects”, that is when the severance packages are determined.

Sabol said closure decisions are “made by GE Lighting executives” and “are not final.”

“These factories manufacture linear fluorescent lamps which continue to experience year after year a double digit decline in demand in the lighting industry,” Sabol summarized in an email. “The other manufactured technology, energy-efficient halogen, has already been regulated out of the market by the states of California and Nevadaand proposed federal (US Department of Energy) policy will soon end nationwide manufacturing and sales.

Savant is a small company that has “a global presence, but (is) not truly global,” Sabol said in March. “(She sells her) products through distributors and (she has) distributors all over the world. The products are sold all over the world, but (it’s) not like a truly global company. In 2014 Reuters reported that Savant was valued at around $200 million.

The Logan GE plant celebrated 65 years in business in 2014, according to The Logan Daily News. Three years later, the newspaper reported that dozens of people had been fired; months later, the same year (2017), the News reported that the plant was for sale. In 2020, Savant acquired GE Lighting, headquartered in Cleveland; in February this year GE Lighting appointed a new president.

According to the National Law Review, the DOE has “proposed to apply the 45 lumens per watt efficiency standard to general-purpose lamps, which would effectively ban the manufacture, distribution and sale of most incandescent lamps. and halogens in the United States. ”

Savant doesn’t know when that standard will go into effect, Sabol said.

“But when it comes into effect, it will give manufacturers and retailers 60 days to stop making halogen products and stop selling them as well,” he said, adding the period could be extended; and that retailers may end up with excess inventory. “But it looks like regulation is imminent, doesn’t it? It will happen,” he said. “It’s just a matter of when.”

Sales of LED bulbs have overtaken traditional linear fluorescent bulbs over the past decade, Sabol said.

The Logan GE factory does not produce halogen bulbs, but rather “the glass for linear fluorescent tubes”, lighting commonly used in offices. However, “there is a drop in demand for these fluorescent bulbs” – again, in favor of LEDs, Sabol said.

A lot has changed in the bulb industry. So LED bulbs (are) energy efficient, it’s true, so they’re great for the environment. They last a long time… And besides, they are not expensive, right?” said Sabol. “So the government, as part of the energy policy, tries to advocate for the adoption of LED technologies and to move away from these older technologies that use more power and things like that… Unfortunately, it’s partly when you make those kinds of decisions, it could potentially impact manufacturers.

The intention to close announcements in March has sparked a Press release of U.S. Senator Sherrod Brown of Ohio, who said in a statement: “Due to market forces fueled by years of poor trade and tax policy, GE-Savant is closing its Logan and Bucyrus plants, laying off hundreds of Ohioans while trying to blame the regulations for their decision.

Brown said the announcements were just another reminder of the increase in offshore production — particularly in China — that makes it “impossible for us to compete” in innovative ways, Brown said. “We need to make more stuff in America – not cede market share in the products of the future to China.”

According to Brown’s office, sales of all types of linear fluorescent lamps (T5, T8 and T12) have declined by more than 50% since 2015.

Moreover, over the past three decades, “trade policy and tax policy have encouraged offshoring,” his office said, citing the permanent North American Free Trade Agreement; permanent normal trade relations with China; Global Low-Tax Intangible Income; Intangible income derived from abroad; and the Base erosion and anti-abuse tax – anything that “encourages people to move jobs abroad”.

“Since innovation happens on the shop floor, if you send all production offshore, all innovation starts happening overseas,” Brown’s office said in its statement.

Brown’s office added that Savant previously moved production of its A19 LED bulbs from the Bucyrus plant to China; a 2021 report by the Bucyrus Telegraph-Forum confirms this.

Sabol clarified in an email that “there are no American-made A19 LED bulbs by anyone.” Previously only part of the A19 LED bulb were assembled at Bucyrus with parts made in China.

The Bucyrus line was shut down because “we couldn’t assemble the bulbs for less than the market is willing to pay for them,” Sabol said. “We now buy the bulbs already assembled in China instead of sourcing individual parts and then assembling them in the United States”

Logan City Auditor Chris Robers said in an email that “if the plant closes, the loss of the withholding tax alone is a significant loss.” Last year, employee withholding tax earnings received from Savant were approximately $94,500.

The Logan Daily News attempted to contact the union that operates at GE Lighting, United Steelworkers Local 1017, but did not hear back in time for publication.