Eastman Chemical, Conduit Global cutting jobs in Tennessee

Posted on Thursday, March 14th, 2019 By Adrian Sainz, Associated Press

MEMPHIS, Tenn. (AP) — Eastman Chemical Co. said Thursday that it is cutting an undisclosed number of jobs globally, citing "the ongoing U.S.-China trade dispute" and an economic slowdown in Europe.

In a statement from company spokeswoman Betty Payne, the chemical and plastics manufacturer said it has seen reduced demand for its products and must do more to manage costs amid "tremendous uncertainty."

Eastman says it is delaying salary raises for employees in certain jobs. The Kingsport, Tennessee-based company also said it is making "a modest and targeted" workforce reduction. Payne would not share specific details.

"We are operating in a difficult business environment, and we had hoped and expected to see stronger signs of economic recovery by now," the statement said.

Eastman makes chemicals, fibers and plastics for a variety of uses in consumer products, including protective coatings and films used in decorative packaging, according to its website. The company spun off from Eastman Kodak and became an independent corporation in the 1990s.

The company reported $10.2 billion in sales revenue last year. CEO Mark Costa said in a Jan. 31 financial report that Eastman had a challenging fourth quarter as demand for specialty products in China fell.

Chemical companies have been caught up in the tariffs battle between the U.S. and China. Hundreds of chemicals and plastics imports from China have been targeted by the U.S., and China has retaliated with tariffs on exports, lobbying group the American Chemistry Council said in September.

Chemical industry tariffs are valued in the billions of dollars on both sides, the council said in a statement. The council calls the tariffs a tax that could lead to increases in prices of consumer products.

"The tariffs will cut off U.S. manufacturers from international supply chains and from importing inputs that help keep them competitive in the global marketplace," said Ed Brzytwa, the council's director of international trade.

Job cuts also have been disclosed in the Memphis area, across the state from Kingston. Call center operator Conduit Global plans to lay off 112 employees next month at its facility in the Memphis suburb of Cordova.

The Tennessee Department of Labor and Workforce Development sent a letter to state officials and members of Congress on March 4 informing them that Conduit plans to make the layoffs effective April 30. No reason for the cuts was provided in the letter.

The $8 million call center opened in 2014 with plans to hire 1,000 workers over several years. The next year, the New York-based company said it was cutting 600 jobs after losing Verizon as a customer.

A Memphis workforce development board will help get necessary services to the employees, who did not have a collective bargaining agreement, the letter said.

Conduit was awarded a $1.25 million grant in December 2013 that was contingent on creating 1,000 jobs by Dec. 15, 2018, said Scott Harrison, a spokesman for the Tennessee Department of Economic and Community Development. The grant had a provision for the recovery of grant funds, Harrison said, and the department is gathering more information on the situation.

Conduit also received a $750,000 job training grant, which is reimbursable based on hiring, Harrison said. Conduit has been reimbursed for about $262,000 of that total, but those funds are not subject to any "clawback" provision, he said.

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Associated Press writer Jonathan Mattise contributed to this report from Nashville, Tennessee.

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