'Off the rails': Norfolk Southern cutbacks stir worries about Hawkins’ biggest factory

Jeff Bobo • Updated May 15, 2019 at 12:35 PM

Statement from Congressman Phil Roe: “There is nothing more important to me than making sure East Tennessee continues to be a great place to do business. Barrette Industries employs over 700 people in Hawkins County and their continued success is important for the region and their employees. I am aware of the concern and am working with leaders in the region to find a path forward that ensures the company can continue operating with certainty.”

ROGERSVILLE — State, federal and county officials are working to resolve a dispute between Norfolk Southern Railroad (NSR) and Hawkins County's largest industrial employer that could potentially cost jobs.

In April, NSR announced about 45 layoffs, which some local officials attribute to a reduction in the amount of coal being transported by rail.

Rep. Gary Hicks (R-Rogersville) told the Times News on Tuesday that NSR is streamlining its operation and becoming more efficient.

As a result, NSR notified Barrette Outdoor Living in Bulls Gap on Friday that it was canceling a lease contract that allowed Barrette to store about 50 rail cars on site that contained the raw “resin” material used in manufacturing.

Barrette employs about 700 people at its Bulls Gap plant, which manufactures plastic fencing and similar products. Its main customers are Lowe's and Home Depot.

The Times News reached out to NSR on Tuesday for comment but didn't receive a response.

Negotiations had "gone off the rails"

Hicks had been serving as a liaison between Barrette and NSR recently as the potential for this change was first begin discussed, and as of last week he thought they were on the road to resolving the issue.

Then on Friday Hicks received a call from Hawkins County Industrial Development Board coordinator Rebecca Baker stating that negotiations had "gone off the rails" and Barrette’s lease had been canceled by NSR.

Hicks then contacted Gov. Bill Lee's office, Tennessee Department of Economic and Community Development Commissioner Bob Rolfe and Congressman Phil Roe to get them involved in the situation.

"(Roe) is going to utilize all the resources he has with Norfolk Southern to really just get everybody to sit down and have a conversation," Hicks told the Times News on Tuesday. "The other side of that is Commissioner Rolfe is wanting to sit down with Norfolk Southern and have a conversation with them as well and find out what is going on. I know Norfolk Southern is trying to implement a process in which they will be more efficient.”

NSR wants to be more efficient

Hicks added, "They're (NSR) saying they want to be more efficient so Barrette doesn't have to worry about storing so many containers, and there won't be a need for 50 containers on site. But Barrette says if something happens with our raw material provider, we want to have that on-site so we don't have to worry about it, and I get that."

Barrette General Manager Gary Williams told the Times News it’s too early to predict the impact of NSR's decision. He said layoffs and reductions aren't being considered at this time.

But Hicks and Hawkins County IDB Chairman Larry Elkins confirmed Tuesday that the potential for Barrette layoffs and a plant relocation have been part of the conversation so far between Barrette and NSR.

"The bottom line is the railroad is making some changes that caused us some discomfort," Williams said. "We don't really know how big that discomfort is or will be. We are trying to work through it with them right now and trying not to play it out in the public, of course."

Williams added, "They are taking away lease track that we've had for years where we store inventory on. We're just trying to work our way through that right now. The impacts of it are totally unknown right now. The severity of it. But we're really going to work hard where it's not an issue."

Could this situation escalate to layoffs?

"We don't know," Williams said. "I don't think so. It really depends on how they (Norfolk Southern) perform at the level they've committed to us that they would. Right now there's been no discussions about layoffs, reductions or anything like that. The bottom line is it's our primary raw material, and they've got to get us that raw material in a timely manner. They're going to try a new methodology, and we're going to work with them to see if we can make it work. It's like anything else. If you don't get raw materials it gets to be a serious issue, but that hasn't happened yet."

“This could shut them down”

Elkins presented the issue to the Hawkins County Commission during Tuesday's budget hearings.

"They (NSR) are really giving Barrette a hard time,” Elkins said. “Barrette now employs over 700 full-time employees, and this could shut them down. It would be difficult to move (the Bulls Gap plant). But it's a real possibility, if we don't get something worked out, that you could lose the largest industry that you've got. So we're fighting desperately to involve everybody from the governor to whoever."

Hicks said it’s unfortunate that NSR finds itself in a position of making cutbacks.

"They're having to lay off, which is forcing them to be more efficient in manpower and more efficient in their processes," Hicks said. "I think what they're trying to do is a good thing for their company, but unfortunately it's really affecting one of its customers right there in Hawkins County."

Hicks added, "It's a fluid situation that could get very serious in a short amount of time. They're around 700 jobs at any given point, so it's very concerning. I don't think there's anything imminent about Barrette shutting down, and we don't want it to get to that point."