A manufacturer in Chattanooga awarded a tax break package in 2023 for plans to expand and add jobs has cut about 20 posts in a restructuring, a company official said Thursday.
The layoffs by Kordsa Inc., a producer of industrial-strength nylon for tires with a plant on North Access Road, were the result of “a negative downturn,” said Riley Moore, a company human resources official.
Moore said by phone Kordsa still employs about 200 people at the facility that for many years was adjacent to the DuPont plant when it was operating.
But in 2023, Kordsa was granted a 10-year tax break from Chattanooga and Hamilton County on a planned $50 million expansion that was designed to create 200 new jobs.
(READ MORE: Kordsa plans $50 million expansion)
At the time, officials said they expected Kordsa would create the jobs and complete the investment over the next five years.
Under the payment-in-lieu-of-taxes agreement, the company would pay no property taxes to the city and county on its expansion in the first year, an amount that would gradually increase to 50% and then remain at that level throughout the last seven years of the tax break agreement, officials said at the time.
In 2023, Kordsa had 238 employees in Chattanooga, officials said.
Kordsa is owned by the Sabanci Group out of Istanbul, a conglomerate with a portfolio that also includes banking, energy and retail.
Earlier this week, another manufacturer in the city that’s seeking a tax break agreement with Chattanooga and the county said it had laid off 19 employees.
(READ MORE: Novonix leaders talk layoffs)
Novonix, the battery materials company with plans for a major expansion in Chattanooga supported by potentially more than $50 million in tax incentives, recently “streamlined staffing” at its existing operations in the city, the company said.
Novonix spokesperson Stephanie Reid said in an email that the move was made “to more closely align with our production timeline and scaling operations over the coming years” to meet growing demand from customers. Novonix employs about 100 people in the city, the company said earlier.
Some public officials said this week that the layoffs left them with concerns about the incentive agreement. The Chattanooga City Council is set to vote on the deal Tuesday. The Hamilton County Commission has postponed its vote until Jan. 29.
This month, officials revealed the proposal for tax incentives to help Novonix build a planned $1 billion plant on 182 acres at Enterprise South industrial park. A second phase could push investment to $2.1 billion, officials said. Also, while the first phase of the factory is to produce 500 jobs, that number could grow by another 675 with the added investment, according to plans.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.
