Lutron Liamuiga Ltd announces to close its St Kitts plant

Incandescent bulb manufacturer Lutron Liamuiga Ltd. has advised St. Kitts and Nevis’ Minister of Labour, Vance Amory, that it has decided to close its St Kitts manufacturing plant effective March 1, 2019.

Lutron has operated in the Federation for more than 31 years. The facility employs 100 workers who will receive severance pay as required by the Labour Department.

In correspondence sent to Amory Oct. 31, Lutron outlined that its decision was due to US Government regulatory changes, made in 2007, that led to a decrease in the demand for its products.

In the correspondence, Lutron representatives explained that the US Government regulations enshrined in the Energy Independence and Security Act of 2007, in 2012 prohibited the manufacture and use of 100 watt incandescent bulbs. also in 2013 there was a similar prohibition on the manufacture and use of 75 watt incandescent bulbs; followed in 2014, by another prohibition on 60 watt and 40 watt incandescent bulbs. This reduced Lutron’s market for its incandescent lighting products to 5 percent and placed significant operational challenges on Lutron in St. Kitts.

Lutron executives advised they gave consideration to the future of their manufacturing business in St. Kitts. Even in the face of the new regulations, which affected the demand for their product, they were willing to engage their workers in the introduction of a new system of production. They considered changing the technology in an effort to improve the efficiency of their operation and to maintain their competitiveness.

The Lutron representatives advised, and it was confirmed by the Department of Labour, that they sought to introduce a more efficient production system called the Self Balancing System (SBS). It required employees to adapt to a new method of work.

Lutron reported that workers rejected the SBS forcing its management to consider taking the steps to discuss the closure of their facility in St. Kitts.

The same correspondence revealed that Lutron engaged its workers in full disclosure of the challenges and its proposed investment to revamp and reorganize the production. Instead, workers opted to have Lutron use the investment for an employee severance package instead of investing in continued manufacturing improvements.

The Lutron letter further advised: “After a careful and thorough review of this request up through the highest levels of our company, we are in agreement with them that it is time to retire the facility.” They also advised “that we (Lutron) are proud to have spent 31 years working with you and the people of St Kitts. It has been a great journey.”

Upon learning of this situation, the Department of Labour responded promptly and on Nov. 1, convened a meeting with plant management, visiting executives and the workers.

The meeting sought to ensure full compliance with the appropriate labour legislation. Company representatives addressed employees’ concerns associated with closing the facility and answered their questions. The issues raised at the meeting were adequately addressed by the Labour Commissioner, who was ably supported by a team of senior management officials of the Department of Labour.

During the meeting, the Lutron workers expressed satisfaction with their proposed payout package and spoke mainly of their intended severance claims to be paid from the Government.

Based on Lutron’s letter and discussions with the workers and management with reference to the payment to be made on the closure of the facility, the Ministry and Department of Labour are satisfied that the remuneration package complies with the applicable legislation, which deals with the protection of employment.

Lutron has agreed to make an ex-gratia payment of 17 weeks to all qualifying workers at the point of closure and in addition, provide a financial allowance for the transition and training of all workers who desire to transition into other fields.

The Lutron payment is in addition to the government payment of severance in accordance with the claims made under the Protection of Employment Act.

Lutron will fund a training programme in collaboration with the Government in which the Department of Labour will assist affected workers. While the Government is unhappy that plant workers will be without ongoing employment, the remuneration package which will be made available and which, based on reports from the Department of Labour and representatives of Lutron Liamuiga were requested and agreed to by the employees would provide a reasonable buffer for the displaced employees.