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Danfoss Commercial Compressors announced Tuesday that it will close its Arkadelphia plant by the end of the year, affecting 170 employees.
The company, which makes compressors for air-conditioning units and commercial freezers, cited declining demand for its products.
Lisa Tryson, the international company’s North America public relations director, told Arkansas Business that the closure was a difficult decision. She said new technology was shifting demand to lower-cost products and that the facility could not achieve the scale it needed to be successful.
The company will be working with the Arkadelphia Regional Economic Development Alliance and the local chamber of commerce to help the employees find work at other Danfoss facilities or elsewhere. Workers will also be offered severance and retention packages for staying on while the plant closes in phases.
Stephen Bell, president and CEO of the alliance and chamber, said, while the number of jobs that will be lost is significant, unemployment is low and there’s local capacity for other employers to hire the displaced workers.
For example, Veolia, a French water management, waste management and energy services company, recently purchased the Alcoa recycling facility in the city’s industrial park with plans to employ 140. Another area company, roofing manufacturing company Siplast Inc., is planning to create 10-15 jobs, Bell said.
He said his organization and the company will be working with the Governor’s Dislocated Worker Task Force to retrain and find jobs for employees.
Bell said city officials weren’t surprised by Danfoss’ decision to close the plant, which employed about 800 in 2006 and has contracted since. He said Danfoss, one of the area’s largest employers, had been reducing hours for employees since the summer, so “we kind of knew something was up.”
The Danfoss plant had endured previous layoffs, including one that shed 45 workers in 2012 and another that cut 100 people in 2011. It added around 70 workers in 2014 and 2015, and benefited from incentives provided by the Economic Development Corporation of Clark County when it moved a production line from Mexico to Arkadelphia.
The plant is owned by Danfoss Group of Nordborg, Demark, which provides services, machinery and other products used in heating and cooling. Danfoss purchased the Arkadelphia factory in 2006.
Danfoss has about 28,000 employees in more than 50 factories throughout the world.