Sep. 21--A 60-year-old Chattanooga medical supply company is in the process of closing down and laying off 316 workers as it falls casualty to a merger.

DJO/Chattanooga Group, 4717 Adams Road, began winding down operations in June and will close completely by sometime in spring 2010, said company spokesman Mark Francois. The Tennessee Department of Labor and Workforce Development released information on the closure today.

In 2007, Vista, Calif.-based DJO, owner of Chattanooga Group, merged with ReAble Therapeutics Inc., which is owned by the Blackstone Group asset-management company. DJO was converted from a publicly traded to a privately traded company and its operations are being consolidated with those of ReAble Therapeutics, Francois said.

Various parts of the Chattanooga company will be moved to other locations Francois said. Manufacturing will go to a plant in Mexico, customer service to Vista, Calif., and other operations moved to different facilities in the United States and abroad.

Workers have been given retention bonuses to remain on the job until operations cease, then they will receive severance packages, Francois said. They would also be eligible for services under the state's Dislocated Workers Program.

Founded in 1947, the Chattanooga Group makes rehabilitation equipment for treating musculoskeletal, neurological and soft-tissue problems. Its products are used by hospitals, clinics and in homes. In mid-May, Chattanooga bestowed its Kruesi Award for Spirit of Innovation on Chattanooga Group for the company's Moveo rehabilitation platform. In early June, employees were notified the plant would close.

"Chattanooga Group was very respected in the industry," Francois said. "But when you have a large merger like that, there is often a lot or relocating operations to other areas."

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