manufacturing: December 2008 Archives

Limited connectivity, so one post:

Bloomberg report: holiday slump to force closings and bankruptcies; expect a lot of activity in February

Lincoln Logs, an upstate New York home manufacturer (not the toy), to be sold at auction following a failed reorganization

DHP Holdings, parent of Desa Heating, filed chapter 11, plans to wind down operations

It's a slow retail news week, so let's make note of the factory employees of Republic Windows and Doors, who spent the weekend and Monday in their factory after the company announced a rapid facility shutdown last week.

Republic, which has been in business since 1965, gave its employees three days' notice that their jobs would be eliminated. In response the staff, which in unionized, began an impromptu sit-in to protest the short notice. The company says it has no credit with which to make severance and vacation payouts; the employees refuse to leave without getting what they are owed. Negotiations were to resume last night.

The economic slowdown affects family-run, local businesses as much as it shakes publicly traded companies. A pair of long-time establishments announced closings this week:

• Modern Metal Products, an auto parts supplier dating to 1946, filed for Chapter 11 bankruptcy. The company expects to shut down; it found a willing buyer, but the buyer was able to arrange financing to complete a sale.
• John Wilson Sporting Goods, a Cedar Rapids-based retailer also in business since 1946, is closing its doors at the end of the year. Current economic conditions prohibit the owner from signing a new lease. Sadly, owner John Wilson is quoted as saying, "I can't see somebody wanting to start a locally-owned sporting goods store."

It's harder to quantify the retail impact of a company closing a factory, but a shuttered plant certainly affects product supply and consumer spending, so it's worth noting the numerous shutdowns announced this week:

• Shaw Industries is closing a fibers facility in South Carolina that makes products for rugs, carpeting, laminate and other uses.
• Aluminum recycler Aleris is shutting a factory in Indiana that has been idle since March.
• In North Carolina, Vaughan-Bassett is closing a plant used for furniture production, citing a dramatic decline in sales this fall.
• Super Steel in Schenectady, which made train components, is closing in early 2009.

These are all fairly small closings (the biggest will affect 400 people; the main auto workers' union has 139,000 members), but they point to cautious companies and lower consumer spending from the recession.