Illinois lawmakers work to keep Olin in state

St. Louis Post-Dispatch
August 28, 2010
By: Jacob Barker

With 1,000 jobs at stake, the state of Illinois and its Congressional delegation are urging Olin Corp. to reconsider moving some of its production from East Alton to Oxford, Miss.

Earlier this month, Olin shocked local and state leaders when it told its unionized workers at its Winchester division that it was considering moving its Centerfire manufacturing operations out of the area over the next five to six years. Olin had already moved some jobs to Oxford in 2004, and the state's nonunion environment and possible incentives could well suck even more jobs out of the Metro East.

On Aug. 19, Illinois Department of Commerce and Economic Opportunity Director Warren Ripley met with local stakeholders, including Rep. Jerry Costello, D-Ill., and Rep. John Shimkus, R-Ill., about what the state could do to keep all of the company's operations in the area, according to Marcelyn Love, a department spokeswoman. The state subsequently entered into a nondisclosure agreement with Olin, she said, and discussions with the company are ongoing.

"We are looking at every option of keeping this company and jobs in Illinois," Love said.

Against the backdrop of a sagging economy and with only two months before elections, Olin's announcement prompted Sen Richard Durbin, D-Ill., and Costello to request a meeting with Olin CEO Joseph Rupp. They sent a letter to him urging him to reconsider and noted that "we have worked hard over the years to help Winchester win critical government contracts."

An Olin spokeswoman said the company would be happy to meet with Durbin or Costello. A spokeswoman with Durbin's office said the meeting would mostly be to figure out what exactly Mississippi is offering and what Olin needs from the state.

Peverill Squire, a political science professor at the University of Missouri-Columbia, said the letter may be more political theater than anything else. Legislators can certainly be helpful advocates, he said, but they are not indispensable for winning government contracts.

"The actions being taken by the Illinois Congressional delegation are as much for their constituents as they are a serious threat to the company's leadership," Squire said.

Some of Winchester's recent contracts with the Army stipulate that work has to be performed in East Alton. A $43 million contract for Army ammunition awarded in March, for instance, says 50 percent of the work is to be performed in East Alton.

A spokesman for the Army said Olin would not be able to move any of its operations required for a project without notice and government approval.

Although exact numbers are not readily available, Olin employs about 1,700 people in the East Alton area. The company has said 1,000 jobs are at stake in the area.

At this point, it's still unclear what the company wants.

Olin's profits have been sliding, though. In the first six months of 2010, the company posted earnings of $31 million. Last year, it had made $74.5 million during that period. In 2009, earnings fell 14 percent from 2008, to $136 million.