Henderson plant laying off 85 workers

Thursday, May 29, 2003 | 11:13 a.m.

The Henderson Kerr-McGee chemical plant will lay off 85 of its 130 employees by the end of next month.

Officials with Oklahoma City-based Kerr-McGee Chemical LLC, an affiliate of Kerr-McGee Corp., said Wednesday that its electrolytic manganese dioxide operations in Henderson would be suspended indefinitely in the company's third quarter because low-priced imports have hurt domestic sales.

Manganese dioxide is the primary active component in alkaline batteries. A Kerr-McGee spokeswoman said she would not identify the company's clients, but that most household batteries use the substance.

The company characterized the suspension as temporary and the layoffs as "furloughs," but spokeswoman Debbie Schramm said no date has been set for returning to normal operations.

Pete Woodward, Kerr McGee's senior vice president of chemicals, said the company is evaluating how it can become more competitive in the manganese dioxide market.

"The analysis will help us determine the long-term plan for the Henderson site," Woodward said in a release announcing the suspension of manufacturing. "The quality of our workforce is as strong as the quality of our product. It is unfortunate that our product sales are being hurt by imports."

Although manganese dioxide is the primary chemical manufactured in Henderson, the Southern Nevada plant also produces boron trichloride, which is used in the pharmaceutical and semi-conductor industries, high-strength boron fibers for various products and elemental boron, which is a chemical that ignites auto air bags.

Schramm said the suspension is unrelated to the company's efforts to sell the Henderson plant. Company officials said in 2002 that it planned to exit its non-core businesses and focus on its oil and gas production and the sale of titanium dioxide pigment.

As part of that strategy, the company said it planned to sell its Henderson plant. The company has not found a buyer and the plant is still for sale.

Schramm said the company's Henderson employees would receive a furlough package that includes layoff pay and health benefits at the employee rate for six months.

Kerr-McGee, which announced last week that it plans to close its 140-employee Mobile, Ala., feedstock plant on June 5 to reduce costs, has sold $954 million in assets since the end of 2001. The company also plans to get out of the timber-products business to save money.

The company's stock closed Wednesday at $47.61, down 31 cents a share from its previous closing price. Share prices have fallen 19 percent since the beginning of the year.