Danfoss Chatleff on Buda’s Goforth Road has been in operation since 1986 but will have to let go of its 120 employees after the plant’s operations are moved to Mexico. (Photo by Sean Kimmons)
by JEN BIUNDO
After nearly 25 years in operation, one of Buda’s largest manufacturing employers is shutting its doors and outsourcing 120 jobs to Monterrey, Mexico, company officials announced last Wednesday.
Danfoss Chatleff LLC, which builds cooling and heating components, will close its 62,000-square-foot Goforth Road plant by the end of 2010. Danfoss bought out the company from local owners in 2007.
“This was a necessary decision,” said Søren Eskildsen, Senior Vice President of Danfoss Automatic Controls. “In order to improve our competitive position, and ensure a long-term profitable business, we have to consolidate distributer production into our Mexico operation.”
Buda City Manager Kenneth Williams called the move a “byproduct of the current economy,” and said the city would feel the loss of jobs and property tax revenue.
“Of course we’re sad to see them go, but we wish them well,” said Williams. “They’ve been a good corporate partner of Buda for a while now and they supplied lots of jobs.”
Austin couple Ray and Carolyn Henderson bought Chatleff in 1978, and over the next three decades they grew the small company into a $50 million powerhouse before selling it to the Denmark-based Danfoss. They say the family-owned manufacturing plant always cared for its employees and earned their loyalty. During negotiations, the Hendersons say Danfoss told them they had no plans to lay off or outsource workers.
“We’re disappointed, of course,” Ray Henderson said. “Some of these people had been with us for over 40 years. We felt they were part of the family and we treated them as such. If we can help them in any way, we will.”
The lobby was full of photos of little league teams sponsored by Chatleff, and they frequently contributed to the community, Carolyn Henderson said.
“It was a family business,” she said. “We always had a picnic every year, we had a Christmas luncheon, we were really just family. That’s one of the reasons that we settled on Danfoss. They implied they would continue our traditions and they wouldn’t lay people off. I’m sad and I feel for the people and I’m terribly disappointed in Danfoss that they would do this.”
Company founders George Chatham and O.O. Shurtleff started Chatleff Controls in Austin about 50 years ago. After being acquired by Calcasieu Lumber Company in the late 1950s, the Ohio-based A-T-O Inc. bought out the company in 1969.
In the down economy of 1975, A-T-O transferred employee Ray Henderson to Austin to take over the ailing company.
In 1978, Henderson and his wife bought out the 30-person operation. With Austin rents skyrocketing in the mid-80s, the family bought four acres of land in Buda and built the plant with a Small Business Administration (SBA) loan, ultimately expanding it to about 60,000 square feet. Henderson patented several new air conditioning components that allowed Chatleff to grow rapidly.
The company had 250 employees and net sales of approximately $42 million in 2006, and by 2007 the family said sales neared $50 million.
During sale negotiations, the Hendersons split the company into two parts, selling the larger Chatleff component to Danfoss. Their son Randy Henderson runs the smaller Lockhart-based company now known as Henderson Controls. That company may hire a small number of the laid-off Danfoss workers, Ray Henderson said.
The family still maintains ownership of the Buda land and plant. Danfoss has two years remaining on the five-year lease, the Hendersons said. City officials said they hoped to see the facility quickly secure a new lease contract.
Business Support Manager Tim O’Grady said the company would wind down production in Buda by the end of the year and move to an existing facility they own in Monterrey.
Employees were surprised by the move, he said, but the company has promised a strong severance package and help finding new jobs. Most of the employees live within Hays County, O’Grady said.
“I’m in the same boat as everybody here,” O’Grady said. “I am going to be reaching out to other local employers and trying to find good positions, because this is a very dedicated, hardworking group of people that have proven their work here. I know I would hire them.”
O’Grady has reached out to Buda Economic Development Director Warren Ketteman. Despite the down economy, Ketteman said Hays County’s manufacturing base is still strong.
“That’s going to be the big push, to help those folks find employment in this area,” Ketteman said. “That’s going to be the first and most important thing we’ll do.”
The U.S. has shed about 5.7 million manufacturing jobs in the last decade, due in part to outsourcing, according to data from the U.S. Bureau of Labor Statistics.
“This did not happen because of anything our workers did,” O’Grady said. “We all need to hold our heads high. It’s a business decision and it’s out of our hands. Things like this happen all over the world every day.”
