WASHINGTON — Federal Prison Industries will close or downsize factory operations at 18 prisons across 14 states as part of a restructuring plan to reduce mounting loses.
The program, also known as UNICOR, operates 109 factories at 76 locations throughout the United States. It will lose $20 million this fiscal year and is struggling with excess production capacity due to deteriorating market conditions, officials say.
The restructuring plan is designed to streamline operations and return the company to profitability through the elimination nonviable and inefficient operations.
In July, officials closed manufacturing facilities at eight prisons, in Alabama, California, Colorado, Florida, Texas and South Carolina. Operations will be eliminated at an additional six prisons, in Arizona, Florida, Minnesota, New Jersey, New York and Pennsylvania, before the end of the year. Operations will be downsized at four other prisons, in California, Kansas, North Carolina and West Virginia.
The restructuring initiative is projected to generate almost $16 million a year in operational savings starting in 2010, officials say. The federal company employs almost 22,000 inmates in a broad range of manufacturing and service sectors as part of a federal program designed to reduce recidivism and help offenders develop marketable career skills.