Role of Glass Container Manufacturing in the Economy of Clarion, Jefferson, & Clearfield Counties
1 Pages Posted: 16 Apr 2010
Date Written: April 16, 2010
Abstract
The Penn State Workforce Education and Development Initiative conducted an analysis of the economic impact of glass container manufacturing in Clarion, Jefferson, and Clearfield counties in Pennsylvania. The analysis was designed to help understand the expected impact of July 2010 layoffs of 402 employees at the Owens-Illinois Inc. plant in Clarion County, Pennsylvania, which were announced during April on the Pennsylvania Department of Labor and Industry's WARN notice website. The impact of these layoffs is likely to be felt beyond Clarion County. The majority of workers commute to work at the Clarion County operation from Jefferson and Clearfield counties, as well as from communities within Clarion County itself.
The Economic and Workforce Brief produced from this analysis provides a benchmark for measuring the total employment, employee compensation, and property taxes associated with every 100 workers employed in Clarion County's glass container manufacturing industry. Because the layoffs expected from the Owens-Illinois facility total approximately 400 workers, multiplying all job, compensation, and tax impacts provided in the Brief by a factor of 4 yields an estimate of the footprint of the Owens-Illinois plant on Clarion, Jefferson, and Clearfield counties.
Owens-Illinois Inc., headquartered in Perrysburg, Ohio, is the largest manufacturer of glass containers in the world, according to the Owens-Illinois corporate website. A 2010 report by IBISWorld indicates that Owens-Illinois Inc. holds 10% of the U.S. market for all glass products. Following a 2008 review of its global manufacturing activity, Owens-Illinois Inc. closed glass manufacturing operations in Canada and Finland. The layoffs at the Clarion County plant are attributed to a decrease in the demand for beer bottles, according to an article appearing in The Blade (Toledo, Ohio).
Products manufactured by Owens-Illinois Inc. are classified in North American Industrial Classification System code 327213. According to the U.S. Bureau of the Census, establishments in this industry "are primarily engaged in manufacturing glass packaging containers." This industry, which produced 20% of all products made from glass in the U.S., sells bottles and jars primarily to the soft drink, beer, and wine production industries. The glass container manufacturing industry competes directly with metal containers for a share of the processed food and beverages packaging market. Also, during the past decade, preserved food and beverage production industries have been substituting plastics, aluminum, and cardboard for glass containers. The threat of substitution of other products for glass containers continues to depress glass container industry margins, although the industry has been boosted by the growth in U.S. beer and wine production and by the shift in consumer preferences to specialty food products packaged in glass jars (e.g., pasta sauces). Glass container manufacturers compete intensely on the basis of delivery capabilities, product design, and advanced labeling technologies.
The Penn State Workforce Education and Development Initiative estimates the glass container manufacturing industry in Pennsylvania employed 1,477 workers during 2008, a loss of 570 workers since 2004. The seven Pennsylvania glass container manufacturing establishments operating in 2008 had a high concentration of Pennsylvania employment compared with the entire U.S. glass container manufacturing industry. Clarion and Jefferson counties alone accounted for approximately 60% of Pennsylvania employment in the glass container manufacturing industry during 2008. Occupations employed in Pennsylvania's glass container manufacturing industry in 2008 with the largest number of workers included: team assemblers; production helpers; packers; extrusion machine operators; inspectors; and first-line supervisors.
Keywords: economic impact, Pennsylvania, glass manufacturing
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