Schutt Sports have informed employees at the Salem plant of their plan to move out of Illinois to Plainfield, Indiana in stages during 2021. The move will start as early as this spring and finish perhaps as late as the 4th quarter of this year.
The information was released in a two-page letter sent to employees by CEO Robert Erb. Schutt is currently headquartered in Litchfield, Illinois where it has another plant.
Erb says it is their strong desire to invite many of the Illinois employees to relocate with them to Plainfield, a town of 35,000 near Indianapolis, Indiana. He says those who move with the company will receive a relocation package to offset the cost of moving. For those who can’t move, Erb said there may still be midterm and long-term opportunities, such as some employees continuing to work effectively from home.
The letter says for those employees who are not offered the opportunity to move or work remotely will have 60-day notice before termination of their employment. Those who remain the entire 60 day notice period would be eligible for a standard severance package and — assuming no immediate opportunities arise — unemployment compensation and benefits, including COBRA medical benefits for a limited time.
Erb says the decision to move has not been an easy one, but it is necessary. He says Schutt’s parent company, Kranos, tried without success to consolidate the facilities in Illinois. But he says the truth is that neither Salem nor Litchfield can support the ambitious plans to ramp up the growth of Schutt Sports LLC organically. Simply put, Erb says the current facilities and communities are not of the scale necessary to support Schutt Sports, LLC’s goals for the future.
Kranos’ financial issues led to the company filing for bankruptcy in December. Erb says the COVID pandemic, inefficiencies in operations due to the absence and inconsistency of critical temporary labor, an adverse patent judgment obtained by competitor Riddell, and tight cash restraints due to banking restrictions all played a role.
The City of Plainfield in October last year approved an incentive package not to exceed a half-million dollars to reimburse the company for certain actual out-of-pocket costs associated with relocating to and equipping a business located in one of the city’s tax increment financing zones.
While no current employment numbers are available, at one point a few years ago the Salem plant had about 150 employees.
Phone calls to two Schutt officials seeking further comment on Friday were not initially returned.