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Hats off to New Era as company adds jobs Local plant boosts production a year after decision to keep Derby site

The whirring of sewing machines fills the plant floor at New Era Cap Co., as workers carry out their share of the 22 steps to make baseball hats.

Colorful caps bearing logos of Major League Baseball teams are visible everywhere, evoking thoughts of sunny days of spring training in Florida on a frigid winter day in Derby.

One year ago, hat maker New Era was at a decisive moment in its history, choosing whether to silence either the Derby plant or a sister operation in Alabama. The Derby site prevailed, providing a sigh of relief for local leaders worried about another factory closing.

Twelve months later, New Era has followed through on plans to add jobs, increase production and invest in its Erie Road plant about 20 miles south of Buffalo. "I think this facility is definitely positioned to be very successful in supporting our needs," said James Patterson, vice president of global operations.

New Era is known locally as the hat company owned by the Koch family, but the brand has gained international recognition from its ties to professional and college sports, as well as fashion and hip-hop.

Last January, its Derby site had nearly 330 employees, about 30 percent of whom were on layoff. As the local plant bolstered production in 2010, laid-off workers were called back and about 80 additional workers were hired. The company plans to hire some more within the next two months, which will raise the plant's total to about 430 people, said Timothy Freer, vice president of global human resources.

Combine that with 250 jobs at its Delaware Avenue corporate headquarters, and New Era's local employment will soon reach more than 675 employees.

New Era has not increased the size of its 100,000-square-foot plant in Derby, but it has altered the layout to make better use of space. The company has invested about $3.5 million in upgrading the facility, and the total investment will reach about $5 million, backed by a $3 million grant from Empire State Development Corp., Patterson said.

"It's our one remaining facility and we take great pride in it, and the employees do as well," Freer said.

In November 2009, New Era was girding for big changes. The company announced it would close a manufacturing plant in Jackson, Ala., and then decide between its two remaining U.S. plants, Derby and Demopolis, Ala.

Due to reduced product demand, New Era could justify operating only one U.S. plant, not three.

Some outside observers wondered whether a homegrown company dating to 1920 would really shut the plant located close to its headquarters, instead of the one about 1,000 miles away. But no one seemed inclined to take the outcome for granted, and elected officials pressed their case for Derby.

David Geary, president of Communications Workers of America Local 14177, recalls he and his co-workers were on "pins and needles, wondering where we would go next."

Then came the decision. "Now it's like 'whew,' we can relax and do obviously what they do very good here, make some caps," Geary said.

After New Era chose Derby, the Demopolis plant was scheduled for shutdown, along with a warehouse in Mobile, Ala., within the first half of 2010. The closings marked a change in course for New Era, which had expanded its operations into Alabama in 1998.

In Demopolis, the 63,000-square-foot city-owned facility New Era used remains vacant. The employment picture for the former employees, who were also represented by the CWA, is a mixed bag.

A few of them were hired at a sewing facility in Selma, about 50 miles away. Others have retired, are using retraining benefits or are still looking for work, said Demopolis Mayor Michael Grayson.

When the Demopolis operation was at its peak employment, it was among the city's top five employers, Grayson said. He remembers New Era's decision to close it as a disappointment to the city.

Grayson said he hopes as things improve for New Era, the company would consider a return.

After New Era selected Derby, its CWA-represented workers at the plant had a role to play. They approved cost-saving changes to their labor contract -- which expires in April 2014 -- that were sought by the company. "I'm sure there were a lot of people that wanted this to be the place that they retire in, so they were willing to look at certain things and make those sacrifices to make that work," Geary said.

With New Era combining three plants into one, the focus shifted to making more hats at the Derby site. The plant aimed to raise output from 6,000 dozen hats per week to 10,000 dozen per week -- an annual rate of 6 million -- by the end of 2010.

The plant added equipment, including some moved from Alabama, but it also needed more people, said plant manager Rusty Hurst.

"The orders were there," Hurst said. "We had a lot of good fortune and a lot of help with human resources with getting people into the building. There was a great [new] work force out there that was able to help us, along with the current work force that we had in here that also did a tremendous job as far as stepping it up."

In the past couple of weeks, the Derby plant has reached the 10,000 per dozen target, thanks partly to employee overtime, company officials said. As new hires come aboard and gain experience, the goal is to continue hitting that rate without the overtime.

Freer said the plant's veteran work force was a big help in reaching the higher production goal. Excluding the recent hires, the average employee has about 17 years of service.

"The skill of some of these operators is amazing," Freer said. "They're so adept at it, from one operation to the next, because there's 22 steps in the cap, and they're not all the same."

The survival of and subsequent growth at the Derby plant is the latest chapter in New Era's long local history. In 2002, an 11-month strike by the CWA came to an end. Both sides say labor relations have improved since then, marked by a labor-management cooperation award in 2005 from the Cornell University School of Industrial and Labor Relations in Buffalo.

New Era's application to join the Fair Labor Association, a Washington, D.C.-based watchdog group, was approved in 2002, an endorsement of its labor practices.

The driving force in New Era's U.S. plant consolidation was a sharp dropoff in orders for custom caps. Many of the small retailers who sold those caps were clobbered by the recession. But demand held strong for New Era's "authentic" collection, the same caps worn by Major League Baseball players. The Derby plant now makes the "authentic" line almost exclusively.

New Era has also seen robust business from a cap machining operation launched a couple of years ago. In that operation, finished caps are embroidered with a logo to fulfill customer requests.

Last year, New Era announced a deal to produce the official on-field headgear for the National Football League, taking effect in April 2012. The company is still deciding where to locate that production.

While New Era -- which does not disclose sales figures -- has consolidated its domestic manufacturing, it has ambitions to continue growing globally. It now has a 20 percent ownership stake in Mainland Headwear Holdings, a Hong Kong manufacturer.

New Era has also beefed up its partnership with MARC4, a privately held brand management company in Brazil. New Era now has a majority stake in that company.

Company executives say they feel the New Era brand and its hats have global relevance, in the worlds of fashion, entertainment and sports, not just baseball.


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