Packaging plant just outside Philly to shut, 80 jobs lost

Union Packaging, for 20 years a rare Philadelphia-area manufacturing success story, is shutting down, owner Michael Pearson said.

The packaging company, based just across the city line in Yeadon, Delaware County, was sold in May to LBP Manufacturing, a unit of Chicago’s Pritzker Group, which Pearson said had expected to give workers expanded opportunities. But LBP has since consolidated and sold Union’s business with other packaging units, and work at the 80,000 square foot plant will be consolidated in Richmond, Va., idling the last of 80 workers on staff when he sold, Pearson said.

Pearson said he’s paid off a $3.5 million Small Business Administration-backed loan from the former National Penn Bank, but found the area’s surviving banks unwilling to provide the kind of flexible financing a growing packaging business needs. He said he had hoped to expand the business, and was at one point close to relocating to Camden, but was unable to come to terms.

He said staff at the Philadelphia Commerce Department tried but was unable to find a larger location in the city. Pearson added that he didn’t get far with the Philadelphia Industrial Development Corp., which controls prime properties.

“Finding a building and doing that relocation became so difficult," added Pearson, an executive at packaging giant Westvaco before he went into business for himself with Union Packaging. "It was hard to really get traction.”

Pearson said his brand of “social entrepreneurship is difficult to maintain. You want to expand, and you need capitalization. But friendly capital becomes much tougher to come by. They want to fit you into their typical way of finance, which doesn’t empower workers."

Pearson expects former Union staff will move to rival plants such as Tevo Packaging in Bensalem, Bucks County.

For his part, Pearson said, he’s been working with Philadelphia-based IronStone Real Estate Partners, which redeveloped the former Medical College of Pennsylvania property in East Falls and is arranging to redevelop the former Provident Mutual Life Insurance Co. campus in West Philadelphia.

“We are closing on Provident on Dec. 19,” he said. “We will have 2,000 people working there eventually.” Core tenants will include Philadelphia Health Management Corp. (PHMC) and the Children’s Hospital of Philadelphia.

Pearson is a member and past chairman of the PHMC board and has also served on the boards of the William Penn Foundation, Greater Philadelphia Chamber of Commerce, and as a Philadelphia Regional Port Authority commissioner, among other well-connected local groups.