Peavey Electronics' announcement of job cuts is simply a matter of survival, according to the company's owner.
Hartley Peavey, a Meridian native who founded his company in 1965, took his company to international success and the Peavey name is widely associated with amplifiers and a large range of other musical equipment used throughout the music world.
Last week, Peavey announced that it was closing its A Street plant, and according to information from the Mississippi Department of Employment Security, 99 people will lose their jobs.
At the time of the announcement, Peavey officials said it is part of a restructuring to remain more competitive. On Wednesday, Hartley Peavey said it was a necessary decision.
"If we are not competitive, we lose business to somebody else. That's what's happening to Meridian and that's what's happening to Peavey," he said. "We are going to do what we have to do to survive."
The U.S. has become increasingly unfriendly to business, Peavey said. High corporate taxes — and locally, higher electricity rates and other growing expenses are making it more difficult to do business in the U.S., he said. His competitors know this, Peavey said.
"I have huge competitors that build absolutely nothing in the United States," Peavey said. "Some of the biggest names in the business don't build anything here."
Most of that industry has gone to China, he said.
"You can't keep increasing taxes and increasing medical care costs. You can't do that so long but then it starts to have an effect," Peavey said. "We've increased our prices to the point to where we can't increase them any more. In order to preserve the jobs for the people I have, which is a lot more than were laid off, we had to do this."
Peavey also said Mississippi isn't business friendly.
"Our government, state and federal, has made doing business ever more difficult in the United States and in Mississippi," Peavey said.
Peavey said the carrier of the company's health insurance informed them within the last year that costs are going up 49 percent.
Another problem his company faces, he said, is finding skilled workers.
"One of our ongoing problems always has been, going way, way back is we can't find trained people," Peavey said. "I've told a succession of people here that one of the problems we have here is we can't find skilled people."
There are about 150 people at the company's headquarters in north Meridian on Hartley Peavey Drive. There are between 50 and 60 employees at the distribution center in the Sonny Montgomery Industrial Park. There are between 70 and 80 people at the international service center on old Highway 80, he said.
Peavey said some of the people being laid off have been with his company for 40 years.
In 2010, the company received a $200,000 grant from the Mississippi Development Authority, which was awarded to help protect jobs threatened by overseas competition. Peavey said those funds were used to help pay for new air conditioners for Plant 3, where they had placed the recently acquired company Composite Acoustic that makes graphite fabric guitars. That plant is still in operation, he said.
"If the average person knew how much governmental intrusion we have, they would do backflips but people like me have to deal with it," Peavey said. "That's what's going on. Our country has become very business unfriendly."
Gov. Phil Bryant was in town on Friday to kick off his Mississippi Works tour. The focus of the tour is promoting the state's business friendly atmosphere, so The Meridian Star asked Bryant what he thought of Peavey's remarks that the state is unfriendly to business.
"It's remarkable to me that Hartley would say that. I think he's had great success in Mississippi and made a very good living," Bryant said. "He's done a good job of helping provide jobs in Mississippi."
Bryant said he first learned about the layoffs through the media and his administration has offered help to the company.
"I would hope that business people in Mississippi would be somewhat positive, particularly those that have been successful with business in Mississippi," Bryant said. "They work hard but there are also a lot of people who helped build Peavey Electronics. That includes the Mississippi workers and we are very proud of them as well."
Kathryn D. Stokes, Strategic Affairs officer with the Mississippi Department of Employment Security, said Peavey workers who have been given a layoff notice will have a session with the department's Rapid Response team.
The team provides workers with assistance in applying for unemployment benefits, resume preparation, information about available training, interviewing tips and referrals to partner services that may be available in their area, such as mortgage assistance, she said.
"The advantage of the Rapid Response session is that all the information is provided, usually at the work site, and all at once with handouts," Stokes said.
Most of the information is also available at the local WIN Job Center or is available online at mdes.ms.gov.
Workers can go ahead and register at the WIN Job Center and get assistance creating their plan of action for when they are laid off. They may also register online at mdes.ms.gov using the "I Need a Job" tab or search for jobs using the mobile app MSWorks, which is available for iPhone and Android phones. They will not be eligible to apply for unemployment benefits until they are actually laid off.