Business

Procter & Gamble to cut 500 jobs in Iowa City

The cuts will be complete by late 2020

Procter & Gamble is seen in Iowa City on Wednesday, Feb. 7, 2018. The company announced Wednesday that it will move 500 jobs from its Iowa facilities to a new plant in West Virginia. (Rebecca F. Miller/The Gazette)
Procter & Gamble is seen in Iowa City on Wednesday, Feb. 7, 2018. The company announced Wednesday that it will move 500 jobs from its Iowa facilities to a new plant in West Virginia. (Rebecca F. Miller/The Gazette)
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Hundreds of workers in Iowa City will lose their jobs as a major employer shifts production out of state.

Procter & Gamble announced Wednesday it will move production of hair care and body washes out of Iowa City by late 2020. Those products will be made in a new plant in Tabler Station, W. Va.

Oral care products made in Iowa City are not a part of the shifts.

The move means 500 Procter & Gamble employees — about 40 percent of the company’s total employment in the city — will see their jobs cuts.

“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 Procter & Gamble people through the transition in a manner consistent with our values and principles,” the company said in a news release.

A spokesman said job cuts will be made gradually and “no major changes” are expected this year. Wednesday’s announcement is a part of a review the company started in 2013 of its North American operations, it said.

Mark Nolte, president of the Iowa City Area Development Group, said he was “heartbroken for the families affected.”

“We knew when they started building the facility in West Virginia that someday this could be a possibility. The reality is this is a logistics opportunity for them to be closer to the population on the East Coast,” he said.

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Nolte said ICAD will work with Iowa Workforce Development, Kirkwood Community College and others to assist affected workers find new jobs, such as through career fairs.

“If there’s a positive to this, we’ve got one of the lowest unemployment rates in the nation. These are highly valued workers. There will be other opportunities for these folks in the region,” he said.

Procter & Gamble’s announcement specifically affects the company’s Iowa City Beauty Care Plant, 2200 Lower Muscatine Rd. The 780,000-square-foot plant was built in 1956 and makes Pantene, Head & Shoulders, Herbal Essences, Olay, Old Spice and Crest Oral Rinse branded products, among others.

“They’ve been one of our best employers for decades. They have a supply chain here that will be impacted as well. They’ve been unbelievably generous to things like United Way and our local school systems, so all of that will be impacted,” Nolte said.

Johnson County Supervisor Janelle Rettig said she was disappointed by Wednesday’s news.

“To lose jobs that are livable wage, it’s devastating to the individuals and will put pressure on everything else,” Rettig said. “My heart is going out to those 500 families that are going to get pink slips. That’s just devastating.”

Procter & Gamble said it will “conduct studies to determine the best use of the areas” in the plant left empty by the shifts.

About 600 people currently work at the Beauty Care Plant. Procter & Gamble also employs 450 at a manual-toothbrush production site and 150 — all hired in the past year — who make power toothbrushes.

“P&G remains committed to the Oral Care business in Iowa City,” spokesman Jeff LeRoy said in an email.

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In addition to the 500 job cuts in Iowa City, the company plans to phase out operations at a distribution center in West Branch, LeRoy said.

“We are currently studying options for the long-term use of the facility, including the option of offering it for sale at some point. At present, we are not able to speculate about the outcome of the analysis,” he said.

He added that employees at the warehouse do not work directly for Procter & Gamble.

A spokesperson for DB Schenker Inc., which operates the warehouse, did not immediately respond to an email Wednesday.

The West Virginia plant, which will be more than three times bigger than the one in Iowa City, will have suppliers on site and be close to three large distribution centers, Procter & Gamble said. By late 2020, Tabler Station is expected to employ 900 people.

Based in Cincinnati, Procter & Gamble reported sales of about $65 billion in 2017. It has about 95,000 employees worldwide.

Gazette reporter Madison Arnold contributed to this article.

About Procter & Gamble in Iowa City

• Total employees — 1,200 at three locations

• What they make — shampoos, conditioners, body wash, oral rinses, manual and powered toothbrushes

P&G’s Iowa City Beauty Care Plant

• Year built — 1956

• Size — 780,000 square feet

• Current employees — 600

• Jobs affected by transfer — 500

• What it makes — Pantene, Head & Shoulders, Aussie and Herbal Essences shampoos and conditioners; Olay, Ivory, Old Spice and Gillette body washes; Scope and Crest Oral Rinse

Source: Procter & Gamble

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