PRYOR, Oklahoma — The Gatorade plant in Pryor is closing, with the company laying off 108 people because of dropping demand for the beverage line, PepsiCo. Inc. said Thursday.
A PepsiCo spokesman said the company needs to shutter the 2-year-old plant to "keep Gatorade's overall manufacturing capacity in line with current market demands."
"We worked very hard over the past year to keep the plant going," said regional spokesman Pat Burke. "Unfortunately, in the end, based on the economic conditions, we determined we could not keep the plant open."
Located in the Mid-America Industrial Park, the 1.4 million-square-foot PepsiCo-QTG plant opened with an investment of $180 million. It made and bottled Gatorade and spin-off brands G2 and Propel Fitness water for distribution in a 13-state region.
The company has already stopped regular production at the plant and plans to wind down operations during the next three months, Burke said.
Employees were told about the closure Thursday as well as given news about severance packages. They will walk away with a package equal to pay for three months and one week of work. Burke said. They will also receive health and other benefits during that period.
Gatorade opened the state-of-the-art plant in February 2008 amid fanfare. Gov. Brad Henry said at the time that it would have an economic impact of about $5 billion in northeastern Oklahoma area over a decade. By December of that year, the facility employed about 250 people.
But as Purchase, N.Y.-based PepsiCo began to struggle with demand for its Gatorade products, the plant was forced to cut about half of its work force. Also, remaining workers were subject to furloughs.
The Pryor facility was PepsiCo's largest Gatorade plant and one of nine nationwide.
Mid-America Industrial Park administrator Sanders Mitchell said he learned of the closure during a conference call with PepsiCo officials Thursday morning.
"It was a surprise to us," he said. "They spent so much money on getting the plant there, and we were very excited about it. But the economy has been tough on a lot of companies."
Pryor Mayor Jimmy Tramel said the plant's closing is a blow to the community.
"It's a sign of the times, and it's a reflection of the global economy," he said. "We're going to lose about 100 jobs for the community. It hurts, and we'll feel the pinch."
One of the industrial park's other major planned projects, a Google Inc. server farm, still has not begun operations. City officials had hoped the Google facility would employ at least 100 people.
Overall, Pryor's sales tax collections were down about 8 percent, or $361,000, during the second half of 2009.
When Gatorade opened in Pryor, it had applied for about $5.7 million in state Quality Jobs Tax incentives that would provide a payroll tax rebate for creating employment. Gatorade received the rebates only on taxes already paid, officials said.
The Oklahoma Tax Commission does not disclose how much individual companies specifically receive in tax rebates.
History of Gatorade plant June 2006: PepsiCo Inc. announces plans for Gatorade facility in Pryor.
Feb. 2008: Gatorade opens $180 million plant with about 200 workers
Oct. 2008: Gatorade lays off 22 people, furloughs plant for two weeks
Dec. 2008: Plant lays off 87 people
Feb. 2010: PepsiCo closes plant, terminates 108 workers
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