GUILFORD – Penquis region residents are reeling from the second economic blow in recent years after Pride Manufacturing Co. officials on Tuesday told their customers and about 60 employees that the Guilford factory would either be sold or closed Sept. 15.

That announcement, which had been rumored for months, follows the December 2001 closing of Dexter Shoe Co.’s manufacturing operation in Dexter which temporarily shifted about 475 people onto the unemployment roll.

The Pride mill in Guilford, established in 1956 by the Pride family, makes turnings, which are wooden pieces used in the hardwood furniture industry, craft and hobby and advertising specialties.

The move to sell or close the facility was prompted by the company’s effort to focus on its core products, according to Bob Burr, Pride president and chief executive officer. Statements that the business is not profitable are erroneous, he said Wednesday. Burr said turnings represent less than 10 percent of the company’s sales, and noted that the product was not growing.

“While we are saddened about our departure from Guilford, we are increasing our production of golf tees in Burnham as part of our growth strategy and we anticipate that this will result in opportunities for our displaced Guilford employees,” Burr said.

That’s good for those offered the job, but the move will leave one more vacant building in Piscataquis County, Rep. Jim Annis, R-Dover-Foxcroft, said Wednesday. It also brings the likelihood that more people with families will leave the region to relocate near their jobs, which will cause a ripple effect on the economy and school enrollment, he noted.

Annis said he recognized that business owners must make prudent choices. “Bob has to do what he has to do to keep the business going, and I support that, as long as he stays in Maine,” Annis said.

As to the announcement, Annis said he was not surprised. “It’s devastating, but I’m not surprised considering what this state has done to business in Maine.”

Most recently, the Legislature adopted changes reflected in the 2006 budget that will hurt businesses, Annis said. For example, businesses will receive only 90 percent of what they paid in taxes for equipment rather than the 100 percent previously received through the Equipment Tax Refund. In addition, the Legislature has imposed a 4 percent tax on paid insurance claims. That latter move will cost Moosehead Manufacturing Co. of Monson and Dover-Foxcroft $30,000 and Mayo Regional Hospital in Dover-Foxcroft $70,000, he said he had been told.

“These are just things that hurt businesses badly and when you’re competing with the rest of the world where labor is much cheaper, it’s devastating to these businesses,” Annis said.

While these changes may hinder businesses, state officials have been offering the company help, according to Jack Cashman, commissioner of the Department of Economic and Community Development. He said his office had worked with the company in the past few weeks on an employee buy-out of the facility which fell apart when one of the prospective owners withdrew from the discussions, he said.

The closure makes it difficult for Piscataquis County, Cashman said. “Piscataquis County is not the Bangor area or the Portland area; these are tough jobs to replace.” His office will continue to work with the company to market the facility and find someone to take over the operation, he said.

Adam Fisher, assistant to the commissioner of the Maine Department of Labor, said his office would provide workers help with retraining and work skills. A team will be assembled to help them work through the issues they will face, he said.

“That industry [wood turnings] has been hit so hard by foreign competition,” Fisher said. If foreign competition had something to do with this closing, the employees also would be eligible for additional benefits, he said.

Burr said all employees will receive a severance package and some will be offered jobs at the company’s worldwide headquarters in Burnham. Employees in the information technology and accounting departments will be relocated to that plant. In early 2006, the remaining 16 employees in the machine shop, which will be unaffected by the September closing, also will be relocated to Burnham, he said.

Efforts are being focused in the next 30 days on selling the business as an operating manufacturing facility or individual business units, according to Burr. If those efforts fail, the only course of action would be to close the facility, he said.