Working on a Solution to Labinal Closing in Salisbury - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Working on a Solution to Labinal Closing in Salisbury

WICOMICO COUNTY, Md. - Labinal Power Systems on Wednesday announced plans to transfer operations from its Salisbury, Md. plant to its Denton, Texas location, resulting in the Salisbury plant closure by Dec. 31, 2016.  A day after the announcement, local leaders in Salisbury and Wicomico County are already formulating ideas and plans on how to rebound from such a large employer closing its doors.

The closure will affect approximately 650 employees who work at the facility located on Glen Avenue.

LPS will systematically move operations from Salisbury to Denton beginning May 2015, the company said. “In order to maintain our competitive position in the aerospace industry, we must restructure our North America operations and consolidate our wire manufacturing business into one U.S. facility,” said Jorge Ortega, vice president of Labinal Power Systems North America.

Wicomico County Director of Administration, Wayne Strausburg, said after meeting with Labinal leaders on Wednesday, the decision for the company to close its door in Salisbury came down to dollars and cents.

"They essentially have two facilities that do the same thing.  The one in Texas is close to their corporate headquarters, it's a newer facility," Strausburg told WBOC on Thursday.

Filling the vacancy left by Labinal will be crucial for the county.  650 jobs lost is not only extremely difficult on the employees and their families, but it is a financial hit for the county overall as well.

"It's a fairly big number.  From a local income tax revenue standpoint,  it could be on the order of a 400 thousand dollar local income tax loss," said Strausburg.

Both Strausburg and Dr. Memo Diriker of BEACON at Salisbury University believe based on Maryland's current economic and tax climate, it would be difficult to bring a new business in to take Labinal's spot.  However, both are confident that under the new leadership of Larry Hogan, attracting businesses will get easier  Diriker added he is optimistic about not only filling the vacancy left by Labinal, but bringing even more businesses to Salisbury and Wicomico County.

"Our trend is positive.  Our trend is upward.  Both in terms of employment, both in terms of job creation, business creation, and most importantly, in wages.  So those positive trends are things we couldn't say a year ago, two years ago," said Diriker.

County and City leaders and financial experts will be meeting with members of Larry Hogan's transition team on Friday afternoon in Salisbury to come up with a plan to deal with and rebound from Labinal closing its doors in Salisbury.

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