Labor Dispute Prompts Ammunitions Manufacturer to Build $100M Facility in Mississippi

November 8, 2010
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user kcdsTM

Illinois’ loss will be Mississippi’s gain — and it is a big loss. Olin Corp., following failed union negotiations with workers, has decided to relocate its Winchester Centerfire Operations–and the accompanying 1,000 jobs–from East Alton, Ill., to Oxford, Miss. The ammunition manufacturer will invest approximately $100 million to build a Class A, 500,000 square-foot industrial building to accommodate the operations center, which will sit near an existing Winchester facility.

Olin had originally planned to maintain the Winchester Centerfire Operations in East Alton. However, after Winchester employees, members of the International Association of Machinists and Aerospace Workers, declined two proposals that would have paved that way for the operations to remain where they are, Olin began considering its options for an Oxford relocation and expansion.

The state of Mississippi and local economic development players then stepped up to the plate to encourage Winchester’s proposed move. Acting through the Mississippi Industry Incentive Financing Revolving Fund, the Mississippi Development Authority made financing available to Lafayette County for construction of what will be a publicly-owned property. In addition, the County contributed the land, located within close proximity of Olin’s existing Oxford facility 75 miles out of Memphis, Tenn., at 411 County Road 101, and provided help with site preparation for the endeavor.

Joseph D. Rupp, president and CEO of Olin, noted that the 500,000-square-foot facility will house all Centerfire operations in one building. He added that, combined with lower labor costs, those efficiencies will allow the firm to compete effectively. The incentives package was extremely attractive, he added.

While Olin has concluded that Oxford is its best bet for the Winchester Centerfire relocation, had the company decided to pick up and move Winchester Centerfire and its Mississippi operations to existing leased space in the major metropolitan area nearest Oxford–which would be Memphis–it would have had quite a few options. While the Memphis industrial market vacancy rate has hovered around 15.7 percent for the last two quarters, according to a third quarter report by real estate services firm CB Richard Ellis, leasing activity has been brisk and has included transactions involving large chunks of space. Hamilton Beach Brands Inc. inked a deal for nearly 1.2 million square feet during the third quarter, the presently none-too-popular BP PLC signed a short-term lease for 600,000 square feet and W. W. Grainger Co. and GreenTech Automotive each committed to approximately 400,000 square feet.

Olin, seeking a smooth transition for Winchester’s move from Illinois to Mississippi, plans to facilitate the relocation process of the operations center over a five-period, ultimately creating 1,000 new jobs for Oxford-area workers.