Managers announced the plans to workers last Thursday (August 5th). At stake are about 1,000 jobs. According to statements from the River Bend Growth Association, Winchester is the area's largest employer with about 1,700 employers. The move, if Winchester goes ahead with it, would be completed over three to five years.
Two factors that may be behind the move are Olin's property tax dispute with Madison County, Illinois and the need to lower labor costs.
One of the factors driving Olin's decision may be its Madison County property tax. The corporation has appealed its East Alton facilities' assessed value each year since 2003, said Kerry Miller, chairman of the Madison County Board of Review.
Last year, the Board of Review, which hears property assessment appeals, put the company's property value at $36 million. Olin's appraisers, however, put the market value of its property at $17 million. Olin has appealed the Review Board's valuation, and it is pending in Illinois' appellate court, Miller said.
Labor costs would probably be lower for Winchester in Mississippi than in East Alton. The workers at the East Alton plant are represented by the International Association of Machinists and Aerospace Workers District 9.While not explicitly stated in either story, it seems to be understood that the Mississippi plant is non-union.
Neither the mayor of Oxford, MS nor the Mississippi Development Authority would not say anything more than they work "to retain and support existing businesses". Illinois officials were not so reticent.
State Sen. William Haine, D-Alton, said he got a call about the potential move from one of the company's lobbyists the day before the announcement. He said he is not sure what motivated the decision.And from the Mayor of East Alton to the Telegraph:
"I'm shocked, to tell you the truth," he said. "I thought they were making money there."
The state could look at some kind of tax abatement for the company's facilities in Alton, but "there isn't any pot of money in Springfield to hand over to anyone," Haine said.
"We don't know how to proceed as a state," he said. "It's pretty hard to assemble an incentive package when we don't know what's driving their decision. And B, it's evident the state of Illinois doesn't have any money."
East Alton Mayor Fred Bright said it would hurt his community, but his experience with the company shows that is not a major concern for management.Mayor Bright's attitude sounds real helpful in attempting to keep his city's largest employer. At least State Sen. Haine is realistic enough to realize that the State of Illinois doesn't have the money to pay them to stay.
"Olin cares for nothing but Olin, itself," Bright said.
Winchester has had a presence in East Alton since 1892 when the Equitable Powder Company was founded there by Franklin W. Olin. Ammunition production began in 1898 with the opening of the Western Cartridge plant.
UPDATE: Sam Pierce of the Illinois Review gives more perspective on Winchester's plans to move. He worked in the Engineering Dept of Winchester for almost 10 years at the East Alton plant. After reading his piece, I'm surprised that Olin didn't move the plant years ago.