BAZETTA -- Kmart Corp.'s financial troubles have affected the Mahoning Valley for the first time with the closing of an auto center in the Austintown Kmart and permanent layoffs at the Bazetta Township Kmart distribution center.
The retailer has closed 283 stores across the country since it filed for Chapter 11 bankruptcy protection in January, but most of its stores in the Mahoning and Shenango valleys survived the cuts. The Kmart store in Neshannock Township near New Castle was the only local closing.
Steve Pagnani, a spokesman for the Troy, Mich., company, confirmed that 77 workers at the distribution center on Perkins-Jones Road, Bazetta were furloughed late last week. The layoffs bring employment at the center to about 500, he said.
Pagnani said no more layoffs are planned for the Bazetta center. The company will be cutting staff at some of its other 17 distribution centers, as well, now that there are fewer stores to serve.
A federal court approved an agreement Tuesday between Kmart Corp. and Penske Corp. on how to shut down Penske's auto service centers at more than 550 Kmart locations nationwide. Penske rented space from Kmart and had closed most of its stores about a week ago.
A man who answered the phone at Penske's Auto Center on Mahoning Avenue in the Austintown Kmart said the center is closed, but he would not say when it closed or how many had been employed there.
Under terms of the agreement worked out last week, Penske agreed to pay for salaries, workers' compensation and severance of center employees.