A. O. Smith reaffirms commitment to Ashland City
Milwaukee, Wis.— The A. O. Smith Board of Directors today approved a business proposal by the management of its Water Products operating unit to continue operations in the Ashland City, Tenn., facility. The proposal was approved based upon financial support and growth incentives government officials committed to the company last week.
“We are very pleased with the support we received from the community of Ashland City and the State of Tennessee in working with us in making this difficult decision for the Ashland City facility,” Ajita G. Rajendra, president of A. O. Smith Water Products Company said. “With the community support and the great team of employees we have at the plant, we expect to continue to excel in serving our customers from this location.”
Management’s proposal includes reinvesting more than $50 million in restoration of the equipment and facility.
The Ashland City plant was inundated with approximately six feet of flood water from the nearby Cumberland River, damaging manufacturing equipment in the plant as well as raw materials and finished goods inventories in the adjacent warehouse. The plant was closed from May 3 until floodwaters receded May 6.
The company provided continued pay and benefits for employees affected by the flood and subsequent plant closing. All salaried employees returned to work by May 10, and hourly employees were called back to work May 17 to assist with ongoing clean-up activities and production equipment restoration.
Immediately following the flood, the company transferred all of the Ashland City production to other A. O. Smith locations in order to provide continuity in supply to its customers. Company management, working closely with government officials, conducted an evaluation process, reviewing the viability of Ashland City as the appropriate location to bring back the manufacturing capacity that was relocated to its other locations during the crisis.
The Ashland City plant began limited water heater production the week of May 24 and has been increasing output steadily, although it has yet to achieve pre-flood production levels without further investment.
In addition to approving the management proposal, which included the government financial support and growth incentives, the Board of Directors requested that management review the actions by the U. S. Army Corps of Engineers and related governmental agencies, and work with these agencies on future preventive measures to protect the investment in Ashland City.
The 1.5 million square foot Ashland City facility serves as headquarters for A. O. Smith Water Products Company as well as its largest residential water heater manufacturing plant. A. O. Smith employs approximately 1,200 people at the facility as well as its nearby Customer Care Facility. The Customer Care Facility was not impacted by the May floods.
After the flooding, A.O. Smith, in partnership with the Community Foundation of Middle Tennessee, established a fund in support of company employees who have been impacted by the flood. To date, the fund has raised $188,000.
A. O. Smith Corporation, with 2009 sales of $2.0 billion, is a global leader applying innovative technology and energy-efficient solutions to products marketed worldwide. The company is one of the world's leading manufacturers of residential and commercial water heating equipment, offering a comprehensive product line featuring the best-known brands in North America and China. A. O. Smith is also one of the largest manufacturers of electric motors for residential and commercial applications in North America.