Companies diversify to prepare for loss of Goodyear’s business
Posted: Wednesday, February 23, 2011 9:29 pm
By: Kevin Bowden, Staff Reporter
By KEVIN BOWDEN
Mike Rinker is concerned about the impact of losing the Union City Goodyear plant, but Vaughn Electric Company in downtown Union City will survive.
Rinker is president of Vaughn Electric Company, which has been a family-owned and operated business since 1949.
The company began in downtown Union City as a partnership between Charlie Vaughn and A.J. Bishop and during the past 62 years has grown into a major electrical motor repair company.
Rinker said the business employs between 40 and 50 workers and with $5 million to $8 million a year in sales. Of that amount, Rinker estimated about 20 to 25 percent of the company’s business comes from local customers.
“Out of that, Goodyear represents about 10 percent of sales,” he told The Messenger, noting that translates to about $500,000 to $1 million a year.
“It will affect us short term,” Rinker said about the recent Goodyear announcement. “I don’t think it will affect us in the long run, though.”
Under Rinker’s management of Vaughn Electric Company, the firm has diversified enough that while the impact of losing Goodyear as a customer will be felt, it will not cripple the company.
“We’re actually seeking other business,” Rinker said.
That means he is working with potential clients across the region, extending his market area into Arkansas and Missouri.
“We’re diversifying,” Rinker said.
What is a major problem for Vaughn Electric is the ongoing loss of industries across the region, and he specifically cited the 2006 announcement by Beckaert that it would be phasing out its steel cord plant in Dyersburg. That plant closure impacted about 200 workers there.
Rinker said that while his company will survive the Goodyear plant closure, it will have a significant impact on the local economy.
“It’s going to get tough for everyone in Obion County,” he said.
Vaughn Electric is one on a list of 10 companies in Obion County that serve the Union City Goodyear plant. The list of impacted companies is dominated by tool-and-die shops and repair businesses.
Southern Machinery Repair owner Ron Cooper has already met with economic development officials who are reacting to the planned closure of the local Goodyear plant by the end of this year. He offered ideas and suggestions on how to deal with the Goodyear loss and encouraged state economic development officials to directly contact the president of Goodyear.
One of the local tool-and-die shops that will be affected by the Goodyear plant’s closure will be D&P Company, which has been around since before Goodyear came to Obion County in the late 1960s.
The tool-and-die shop is owned by Brooks Duncan, who told The Messenger Tuesday, “I hate to see Goodyear go.”
He refused to give out any specific details about the economic impact Goodyear will have on his shop, but he did say, “I do quite a bit of work for Goodyear.”
Duncan went on to say that he has been working on diversifying his customer base and that he has picked up a few new clients in recent years.
“I wish they wouldn’t leave, but it appears they’ve already made up their minds,” he said.
In addition to his tool-and-die shop, Duncan said he also has several rental properties in the community and he expects the Goodyear news will affect him there as well.
It has been previously reported in The Messenger that a 2009 economic impact study estimates the direct and indirect workforce impact of Goodyear was 3,505 workers in 2009. The study estimated the total wage impact from Goodyear at more than $184 million.
At the state level, the state Department of Economic and Community Development’s Feb. 17 online newsletter reported on Gov. Bill Haslam and Commissioner Bill Hagerty participation in their Job Creation Road Show’s visit to Chattanooga. The recent Chattanooga visit represented the second in a series of roundtable discussions with business leaders and economic developers about job creation, according to the online newsletter.
“The governor told the gathering that Tennessee is compiling a budget plan without the benefit of $1.5 billion in federal stimulus dollars in the coming year,” the newsletter stated in part. “Governor Haslam also said regional partnerships between communities seeking to attract new jobs is going to become more important in the years ahead.”
The state newsletter also reported that Commissioner Hagerty participated in a Regional Jobs Roundtable in Maryville on Tuesday.
Staff Reporter Kevin Bowden may be contacted by e-mail at email@example.com.
Published in The Messenger 2.23.11