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July 16, 2009
Unicor memo: Closing of Existing Factories
U.S. Department of Justice
Federal Bureau of Prisons
Washington, DC 20534
July 15, 2009
MEMORANDUM FOR ALL UNICOR STAFF
FROM : Paul Laird, Assistant Director Education, and Vocational Training
SUBJECT : Factory Restructuring
Throughout this fiscal year, we have implemented a number of cost
containment initiatives to offset the ongoing losses we have been
experiencing. Year to date, the corporation has a net loss of
over $20 million, and we have had negative earnings for the last
seven months . While the cost reduction initiatives have been
helpful, they have not been sufficient to reverse the negative
earnings trend. Therefore, it is necessary to further reduce
operating expenses by downsizing and closing some existing
factories .
Yesterday, we initiated the closing of factories at USP Coleman I
& II, FCI Victorville II, USP Florence, FCI Talladega, FCI Big
Spring, FCI Williamsburg, and FCI Estill . We are also closing
operations in specialized units at FCI Sandstone, FCI Fairton,
FCI Otisville, FCI Marianna, FCI Phoenix, and FCC Allenwood. In
addition to these closings, we are also downsizing operations at
FCC Lompoc (Cable) ; FPC Alderson (Distribution) ; FCC Butner
(Filter) ; and USP Leavenworth (Distribution) .
These actions were necessary to reduce our excess production
capacity and staffing to a level consistent with the current and
forecasted business activity .
Some of the affected staff positions at the above locations are
or will soon be vacant . However, many are encumbered, and we
will need to vacate those positions as we did during previous
factory reorganizations.
This was an extremely difficult decision because it affected a
number of dedicated FPI staff. However, it is critical that FPI
not incur costs that we have insufficient business to support .
These factory initiatives will reduce operating costs by nearly$16 million per year, although they will not take full effect
until late 2010 . These savings and other cost containment
initiatives will be critical for us in returning the corporation
to a profitable position in the future.
I understand this will be a very difficult and unsettling time .
We will do our best to keep you informed of any further
developments and progress . During this time, it is imperative
that we all do everything we can to reduce our costs and increase
our efficiency . We will also continue to aggressively pursue new
business opportunities and new product lines . Working together,
we can overcome the challenges ahead and ultimately establish new
lines of business in our impacted factories .
cc : Chief Executive Officers
FPI Board of Directors
Posted by lois at July 16, 2009 10:35 AM