At the root of New Era's decision to close its Derby plant? It depends on which congressman you ask

Nov 16, 2018

A local congressman is vowing to help New Era Cap Company work through tariff concerns, as he hopes to convince them to abandon a plan to close its Derby manufacturing plant. But another congressman thinks the problem isn't in Washington, but in Albany.


New Era Cap Company, which is headquartered in Buffalo, released a written statement earlier this week confirming it had informed the Communications Workers of America, the union representing more than 200 employees at its hat manufacturing plant in Derby, that it is "considering the discontinuation of operations" as part of the company's effort to realign its business model to more closely match those of its competitors.

Two years ago, New Era Cap Company CEO Chris Koch (right) joined Senator Charles Schumer and then Buffalo Bills executive Russ Brandon to announce product lines of National Football League caps would be produced at New Era's Derby plant. Two years later, the company is planning to shut that facility down.
Credit WBFO file photo

That model, it was explained in the statement, means getting away from owning and operating its own factories. 

Congressman Brian Higgins, a Buffalo Democrat, says the company warned back in August (see attachment within link) that tariffs imposed by the White House on finished headwear imported from China might force them to make decisions to cut domestic operations.

"About 90 days ago, New Era provided formal comments to the US Trade Ambassador, Robert Lighthizer, and basically said that the tariffs on headwear, if they were to go into effect, the new costs would force New Era to immediately and significantly cut its US operations including workforce reduction," said Higgins. "It's hard not to include the tariffs had something to do with this."

New Era Cap Company is currently in a contract with Major League Baseball to produce the caps worn in games. Those operations, if the company moves ahead with the shutdown of its Western New York operation, would be moved to a facility in Florida.

Another Western New York representative, Southern Tier Republican Tom Reed, suggested Thursday that tariffs are not the issue. Rather, it's economic policies coming from state government, specifically the Cuomo Administration. He suggested companies like New Era are left to struggle under the burden of the state's taxes while the administration recently gave a billion-dollar-plus package of incentives to secure a share of Amazon's "HQ2" operation, a highly-coveted development which drew bids from other parts of the state, including a joint pitch by Buffalo and Rochester.

"What it appears is they're more focused on is trying to put together deals for certain companies as opposed to others, rather than recognizing manufacturers like New Era and others that have been making decades-long if not hundred-year-plus commitments to New York State are having to leave because they cannot make an economic go of it.

New Era, in its statement, says it has no plans to relocate its downtown Buffalo global headquarters.

Higgins says he'll use his role in the House Ways and Means Committee to help provide New Era some tariff relief.