Procter & Gamble to cut 500 jobs in Iowa City

Procter & Gamble will cut 500 jobs for Iowa City workers as it shifts production from Iowa City to a new factory in West Virginia over the next few years. 

Jeff LeRoy, senior manager of communications for Procter & Gamble, on Wednesday said in a news release that by late 2020, production of hair care and body wash products at the 2200 Lower Muscatine Road beauty care plant will be moved to P&G's new facility in Tabler Station, West Virginia. Production of oral care products at the Iowa City facility, performed by 100 employees, will not be affected, he said.

The cuts represent a significant portion of the Lower Muscatine Road facility's workforce. In addition to the 100 employees who are not affected by cuts at that location, the company has about 450 employees who manufacture manual toothbrushes and about 150 employees who manufacture power toothbrushes at other facilities. The company last year expanded its Oral-B power toothbrush manufacturing operations to the former Menards building at 1375 Highway 1 and has hired several of those positions over the past year.

"Decisions like this are never easy, but we are communicating this decision more than two years in advance to help our employees plan for the future. We are committed to supporting P&G people through the transition in a manner consistent with our values and principles," the company said in a statement.

P&G said it will negotiate with the local labor union "regarding support to help employees transition to opportunities," including possible transfers to other P&G facilities.

Mark Nolte, president of the Iowa City Area Development Group, said the group will be part of a coordinated response with organizations like Iowa Workforce Development and Kirkwood Community College to aid the affected employees.

"We live in a community that's going to get behind the folks who are affected, and our heart goes out to the family affected," Nolte said.

Nolte said ICAD Group has had discussions with P&G about the reduction and said he is heartened by the growth of its Oral-B operations in Iowa City. LeRoy shared details of the power toothbrush manufacturing expansion with the Press-Citizen last year, and Nolte said that growth is "a trend we see continuing, by everything we've been told."

"We're optimistic that a lot of those folks will have opportunities at the Oral-B side, and, first and foremost, I think the company is going to do all they can to help their employees find positions within P&G, either locally or at other plants around the country," he said, adding that it's going to be "business as usual" for the next 18 to 24 months.

"It's really a testament to their character as a company. They could have made these cuts overnight, but we've got two years," Nolte said. "One of the positives here is that we have one of the lowest unemployment rates in the country, and we've got employers all over who are eager for talent. I would hope that there will be other job opportunities for most of the people affected when the time comes."

Nolte said ICAD Group also will work to support companies that supply products like plastic bottles to P&G that will be affected by the reduction.

Iowa City's beauty care plant, built in 1956, is about 780,000 square feet and produces Pantene, Head & Shoulders, Aussie, Herbal Essences shampoos and conditioners; Olay, Ivory, Old Spice and Gillette body washes; Scope and Crest Oral Rinse. The company said it will conduct studies to determine how best to use the space left in the Iowa City plant after the transition.

LeRoy said in an email that P&G remains committed to its oral care production in Iowa City and across its 25 plants in the U.S. He said over 90 percent of products sold in the U.S. are manufactured within the country.

Iowa City Manager Geoff Fruin said he also is encouraged by the "significant growth" of the company's Oral-B operations over the past year and its capital investment of about $1 million toward that expansion, but said the city is disappointed by the news of the job shifts.

"Above all, our thoughts are with the employees affected by this decision," Fruin said. "We want to make sure we play whatever role we can in supporting those employees over the next couple of years."

Fruin said P&G also has ensured the city that it will meet with the local labor union representing the employees. He also said the city has more questions than answers at this point, but will "work with P&G officials as close as we can over the next several months to determine what the future of the plant will be."

P&G, in its statement, said the decision is part of a study of its North American supply network that began in 2013. The decision is intended to "help us more efficiently and effectively serve retailers and consumers across the country."

The company also plans to close its Kansas City, Kansas, facility by late 2020 after it transfers production of dish care products from that site to the new Tabler Station facility,  and production of chemical ingredients to its Ivorydale chemicals plant in St. Bernard, Ohio. These transfers will result in cutting a total of 280 full-time positions.

P&G said, after the transitions have been completed, the number of Tabler Station employees will rise from 700 to 900. The new facility is much larger than the Iowa City and Kansas City facilities, the company said, will house suppliers on-site and will be closer to the company's three large distribution centers.

Reach Andy Davis at 319-887-5404 or at aldavis@press-citizen.com, and follow him on Twitter as @BylineAndyDavis.