It’s been about four months since Paramount Cards moved its production functions to Ontario, Canada. As the oldest and third-largest greeting card maker in the nation, the company did not make the decision lightly.
Moving production meant packing and shipping equipment to a newer plant in Ontario. It meant selling the rest of the equipment. More importantly, it meant laying off about 230 employees – a significant loss of manufacturing jobs.
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“No business alone can avoid the realities of the marketplace,” said Hamilton Davison, Paramount president and CEO.
The realities of the marketplace, Davison explained, include the pressure to battle with competitors increasingly utilizing offshore production in places such as China, where production costs are much lower than in the United States.
In addition to global pressures, Davison said, some local issues played into the decision to move, including the high cost of health care and a shortage of well-trained workers. Many potential employees coming out of the public schools, he said, lacked basic math and literacy skills.
“I think as a nation and perhaps as a state we can change, we can influence the outcome,” he said. “It’s got to be government-driven. It can’t be company-driven. We have to decide this is important.”
Still, he said, even if the state had cheaper health care and stronger schools, it’s hard to say whether the company would have kept production in Rhode Island.
Another factor in the move was that the 330,000-square-foot Ontario plant is newer and more automated, which means it requires less labor to make each card, he said. The Ontario plant is more efficient and cost-effective, and it has high ceilings, which allow for more storage.
“We’ve been making more of our cards up there for some time,” Davison said.
About 90 employees are staying at the Pawtucket site, in marketing, design, customer service, finance and administration, Davison said.
Keeping headquarters in Rhode Island is important, because Paramount markets its product in the United States, and the Pawtucket office supports U.S. customers. “There’s no right reason to move all of that,” he said.
To help employees find other jobs, Davison said the company gave many of them about six months’ notice, and provided workshops, job fairs and a place to work on their résumés.
The company also worked with the R.I. Department of Labor and Training to secure special benefits for the displaced employees.
Raymond Filippone, assistant director of income support at the department, said his office got Paramount’s workers qualified for two federal programs: the Trade Readjustment Assistance Program – linking the job losses to the North American Free Trade Agreement (NAFTA) – and the Alternative Trade Act Assistance Program, which helps older workers who don’t have transferable skills.
Under the TRA program, Filippone said, Paramount employees who can’t find a job will be eligible for up to 130 weeks of unemployment benefits: 26 of basic benefits, 26 more because of the TRA designation, up to 52 more if they’re enrolled in a job-training program, and yet another 26 weeks if, in order to qualify for a new job, they had to get remedial education.
In addition, under the ATAA program, eligible workers who get a new job, but with lower wages, can get 50 percent of the difference between their old and new pay for up to two years, or a maximum of $10,000, Filippone said.
With the production equipment and employees gone, most of the 340,000-square-foot Pawtucket plant – parts of which are more than 100 years old – now sits vacant.
“The building is up for sale,” Davison said, adding that it has yet to be determined whether Paramount’s offices would stay or leave once the manufacturing plant is sold. “We don’t need all the space,” he said.
Herb Weiss, economic and cultural affairs officer in the Pawtucket Department of Planning & Redevelopment, said there’s no shortage of developers who might be interested in buying the plant. But uncertainty over the future of the state’s historic tax credits has already driven away one prospect, California-based Urban Smart Growth.
Weiss said the layoffs also have an “economic effect” for the community. “Those people … we want to try to absorb them in other companies around where they live.”
