Saturday, August 1, 2015

Day & Zimmermann nears deal with Army for Kansas plant

The $2.7 billion Philadelphia company said it has reached agreement with the U.S. Army to maintain operations of a munitions plant that it has operated for more than 40 years.

Day & Zimmermann nears deal with Army for Kansas plant

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Any time the military decides to close an installation, two things are sure: It will take a long time before the lights go out, and even longer for the site to find a new use.

In Philadelphia, the former Navy Yard is being transformed into a business hub. In February, city officials celebrated that 10,000 jobs and 130 companies are now located there. It took more than a decade to get to that point after the Navy signed over 1,000 acres in 2001.

Kansas encountered its own military conflict when a massive ammunition plant in Parsons was placed on the 2005 Base Realignment and Closure (BRAC) list. As with the Philadelphia Navy Yard, employment at the Kansas Army Ammunition Plant peaked during World War II, topping out at 7,358.

Ordinarily, I wouldn’t pay much attention to a 13,700-acre base hundreds of miles from Philadelphia. But I do when a privately held Philadelphia company with $2.7 billion in annual revenue has been operating a munitions plant there for more than 40 years.

Day & Zimmermann Inc. has been managing the Kansas plant since March 1970, making all sorts of ordnance, detonators and antiarmor cluster bombs. During the Gulf war in 1991, the company employed about 1,300 people there.

The BRAC process in 2005 spelled the likely end of the operation, just as the same list led to the closure of Willow Grove Naval Air Station in our region. Activity in Parsons had already dwindled, with Day & Zimmermann employment having slipped to about 300 people.

Kansas didn’t fight the installation’s closure. Rather, the region formed the Great Plains Development Authority, which took title to a total of 6,800 acres in August. Officials have hopes of turning the complex into an industrial park.

Day & Zimmermann, too, wound up negotiating with the Army for 7-1/2 years to buy 4,112 acres and continue operating the plant, where it now employs about 150 people. After announcing an agreement in July, the transfer didn’t occur in August as the company had hoped.

It’s not clear why. Mike Yoh, president of Day & Zimmermann’s munitions and government business unit, said in a statement that the company had “worked tirelessly” to reach an agreement, and that it’d been a “difficult process for our company and our employees.”

On Saturday, the company announced that it had signed a new deal with the Army, but would not disclose the financial terms. A spokeswoman for the company could not be reached for comment Monday.

All that’s left “is to consummate the transfer of the property with the Army,” Yoh said in the statement. “Then we can put this long, arduous process behind us.”

So is it really a done deal this time? Mission accomplished?

When the military is on the other side of the negotiating table, it’s probably best not to count your munitions before they’re in the bomb rack.

Inquirer Columnist
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About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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