Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 25, 1992 TAG: 9203250144
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Medium
To operate the 400-employee facility in a cost-effective manner, "we need more volume going through this plant to cover the expenses," said Cathy Staples, a company spokeswoman in Roanoke.
Cooper's mining and construction business cannot compete effectively on a global basis at its current size, said Michael J. Sebastian, executive vice president of the Houston-based company.
The company's first move is to seek a complementary business "that we can combine with our mining and construction operation," Sebastian said in an announcement.
If that isn't possible, he added, "we would like to find a strategic buyer who could take our operation and make it stronger by combining it with their own business."
In Roanoke, Staples said the company has no deadline or time-table for acquisition or sale.
Cooper has employed First Boston Corp., a major player in mergers and acquisitions, as its adviser on the future of the Roanoke plant. Cooper's corporate planning group is leading the acquisition activity, Staples said.
Gardner-Denver eight years ago moved into a $14 million building, making it the first tenant in Roanoke's Centre for Industry and Technology. The 326,000-square-foot building is the Roanoke Valley's second-largest factory, after the General Electric plant in Salem.
Gardner-Denver's sales have been down, especially in the domestic market, during the recession. The company laid off 52 employees in November 1990. Some salaried positions were cut and attrition left other jobs vacant, Staples said.
Staples said the company told employees of the expansion or sale Tuesday and the plant was conducting business as usual.
The division headquarters was moved from Dallas to Roanoke in 1983. The division also includes a plant in Sheffield, England, employing about 400 people to make steel used in drilling.
Gardner-Denver, acquired by Cooper in 1979, makes pneumatic and hydraulic percussion rock drilling equipment, rotary blasthole drills, portable air compressors and related drilling accessories. Many of its products are flown to markets around the world.
When the company moved from a small Salem plant to its new Roanoke operation, it grew rapidly to reach a work force of 640 people in less than 18 months.
The plant was dedicated in a recession. Cooper Chairman Donald Cizik said at the time, "Opening a plant during a slump in the mining and construction business was a gamble. But everything in life and business is a gamble."
Cooper, a diversified maker of electrical and automotive products, electrical power, petroleum and industrial equipment, had revenues of $6.2 billion last year. The company recently raised its quarterly dividend from 29 to 31 cents a share of common stock.
Brian Wishneff, Roanoke's chief of economic development, said Tuesday that Cooper "has a first-class facility and a first-class work force that would be in excellent shape to continue." He said Roanoke "obviously will work with Gardner-Denver or any other entity to do whatever is possible" for the plant.
Len Boone, president of Roanoke Valley Economic Development Partnership, said, "I hope they expand or another company would utilize that new facility."
Ingersoll-Rand's Rock Drill Division, a few miles away, makes products for markets similar to Gardner-Denver's. It, too, has employees on layoff. "We hope we've bottomed out, but we'll know in the next couple of months," said Mike Merlo, the division controller.
by CNB