Envelope plant's closing another hit for Austell

“The development now in Austell is gone,” Mewborn said. “National Envelope closing is a bad hit for Austell. This is going to become a little dead town.”

The plant has operated along Humphries Hill Road since the mid-1970s, employing generations of the city’s residents and boosting the local economy. But, like other corporations hit hard by the recession, the company, founded in 1952 by Holocaust survivor William Ungar, filed for bankruptcy in June and was acquired by the Gores Group LLC of Los Angeles.

National Envelope declined to provide specific numbers for displaced employees. But Austell long ago tired of bad news.

The town’s population in July 2009 was just over 7,000, according to City-data. Austell was ravaged by last September’s floods which damaged more than 700 homes and businesses. As a result, the city’s tax digest dropped 18 percent, or $44 million, to $195.2 million this year. With the drop in the digest comes a drop in property tax revenue.

National Envelope paid about $30,000 in property taxes in 2010, according to Cobb tax commissioner records.

“It’s sad that it’s happening [the plant closing], but the economy’s so bad that these kinds of things do happen,” Austell Mayor Joe Jerkins said. “I think it’s like everywhere else, the economy is bad and everyone is hurting, especially in construction. There’s really no construction going on.”

In addition to National Envelope’s plant closing , the city has lost other jobs. Home Depot closed a clearance center in the city in January. In June 2009, Caraustar Industries, a recycled paperboard and packaging company based in Austell, filed for bankruptcy and laid off several employees when it reorganized as a private company and eliminated debt.

Down the street from National Envelope at the local watering hole, Fat Cats bar, owner Ken Estes has become a sympathetic ear.

“Business around here -- period -- has slowed down. A lot of my regulars have taken layoffs from National Envelope and several others around here,” Estes said. “For a lot of [the workers] it’s a shock to them. They worked 10, 15 years at a job and thought they were secure. But nobody’s secure anymore.”

National Envelope’s Austell employees in particular thought they were secure, at least for another three years, after a contract agreement was approved with the Gores Group on Sept. 1,  said Ralph Meers, president of the Graphic Communications Union, Local 527-S, which represents 185 of the plant’s employees.

“We thought everything was going along good until the rumors started about the plant closing and even then, we were assured that nothing was going on,” he said.

On Oct. 18, the company notified employees and the state of its intentions to close the plant, according to a letter sent to the state's labor department. Meers was notified the night before in a call to his home, he said.

The union has filed charges with the National Labor Relations Board against the company for bargaining in bad faith and misleading the union. The NLRB has not completed its investigation.

“We believe we acted appropriately, are in compliance with the law and will be able to show that to the [NLRB]," the company said in a statement.

In another statement from National Envelope, the company said there are no current plans to close the plant in Smyrna.