Tuesday, February 9, 2010
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Another round of layoffs hits Owatonna employers
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By CLARE KENNEDY

ckennedy@owatonna.com



OWATONNA — After a lull in cutbacks, Owatonna’s manufacturing sector has gone through another round of layoffs, with both Viracon and Wenger announcing cuts in staffing.

Officials at Viracon have cut 80 full-time employees, wrote Christine Shaffer, the marketing manager for the company — a 6 percent reduction of the company’s total workforce. Shaffer further stated that “approximately half were voluntary.”  

Shaffer also confirmed reports that the company laid off 75 temporary workers. Shaffer described the cutbacks as a function of cyclical activity in the construction market.

“We hired them to help us manage production volume fluctuations during the construction season,” Shaffer said. “Their assignment ended Oct. 30. It’s common during summer and early fall — there’s always higher demand to meet. Historically that’s always the case.”



This is Viracon’s third round of cutbacks. The glass fabrication company laid off 250 people in January 2009, citing the nation’s economic downturn and the cancellation of building projects across the country. At the time, the cuts constituted a 15 percent reduction of the company’s workforce, the largest in Owatonna’s industrial sector.

In March layoffs swept Viracon again when nearly 100 employees were eliminated.

On Nov. 10, Wenger Corporation laid off 23 people, according to a written statement from Tom Carman, vice president of human resources at Wenger. The layoff reduces Wenger’s permanent workforce by 5 percent. Carman characterized the cuts as “across the board.”

The is the second major layoff at Wenger since the beginning of the year. In April, Wenger laid off 21 people on both the factory floor and the non-production side. The company also cut base wages and salaries for all employees who remained.  

 Unlike many other manufacturers, Wenger’s financial welfare is linked to the public sector and government — schools, public colleges and universities. In Minnesota, for example, Gov. Tim Pawlenty sliced 73 percent of public school funding in 2010, with eventual repayment in 2011, and the Minnesota State Colleges and Universities system lost $50 million in the cuts.

Such cuts have had a ripple effect on Wenger, company officials said.

“Nearly every state in the country faced large budget deficits in 2009,” Carman wrote. “Since education is the single largest component of most state budgets, spending on education has been dramatically reduced in order to balance state budgets.”

However, Wenger expects a “significant improvement” in their market in 2011 and 2012.

“We will continue to monitor our business and to adjust to market conditions While we expect 2010 to be another difficult year,” Carman wrote. “We will emerge from this economic recession stronger than we have ever been.”

Recent statistics suggested that unemployment in Steele County was on the decline. Steele County’s unemployment hit a high note in March at 9.6 percent, but by September the unemployment rate had fallen to 7.7 percent. The next figures will be available Nov. 24.



Clare Kennedy can be reached at 444-2376.
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Member Opinions:
By: Whereiscommonsense on 11/13/09
And what exactly is our city leadership doing to attract new businesses, to assist in fostering existing businesses to avoid such drastic measures...we can only "cut" so deep with budgets and loss of jobs before it will have a total impact on everyone of all ages, all health conditions, all fiscal standings within the classes.

So again I ask, what proactive measures are being discussed and better yet...implemented to stem the tide on these reoccurring job layoffs, business closings, etc. sure not seeing any "growth" in existing or new businesses that are adding to the tax base or well being of the town citizens!

By: atlascollapsed on 11/14/09
What is our local govt doing for businesses? Good question. But in the case of Viracon and Wenger what will keep them from laying people off the buying of glass and musical products respectively. If consumers aren't buying products they cant pay their employees. Pretty simple actually.

By: atlascollapsed on 11/14/09
Oh Jeffery and Clare... There is a wholly untrue statement of fact that should be corrected in tomorrows paper. Where Miss Kennedy wrote " In Minnesota, for example, Gov. Tim Pawlenty sliced 73 percent of public school funding in 2010, with eventual repayment in 2011" The governor did not slice, dice, slash, chop, puree or grind 73% of public scholl funding. He simply used an accounting shift that was part of a DFL sponsored budget bill. He delayed payment on an extra 17% of funds until the following year. Prior to this biennium payments were on a 90/10 split, now they are 73/27.The difference between 90 and 73 is where you get the 17% delayed payment. Actually K-12 had no reductions in relation to previous years. I think the readers of the OPP deserve a correction as the information presented in this article nowhere near factual. Thanks much.

By: depressed81 on 11/14/09
And Obama says the economy is getting better. I would really like to know where because it ain't any better here.

By: Tiny on 11/14/09
But Viracon wants to have there Employees work overtime now,After they let employees go. IMAGINE THAT, they still can't manage there work schedules, Sure glad I don't work there anymore!! (I quit years ago!!)Still the same old B.S.

By: Dallas on 11/14/09
There's very little overtime at Viracon. It's often cancelled.

By: pookah on 11/14/09
depressed81 - Wall Street, where the money is printed and invested into anything that is paper.

Once the cutbacks are realized on paper, then the market will tank. The double dip is on its way, and unless you get rid of the Fed, it will happen no matter what happens with Obamanomics...

By: secretsquirrel on 11/14/09
Tiny, one basic cost cutting device in a manufacturing environment is the use of overtime.
Once you have zeroed in the process, cut all possible times and material investments, you look at overhead.
Part of your overhead is the cost of insuring, training and providing health care benefits to employees.
It is cheaper to work the overtime because the associated employee costs: training, insurance and health care benefits are static. Meaning, you only pay once per employee per month. If you have several employees and no overtime, your efficiency drops while your overhead increases.
Just something to think about.
So, if Viracon has reduced overtime and spread the hours out, it was an attempt to save as many employees as possible and a risky venture to do so.
When the big cuts do come, more meat and less fat goes with subsequent cuts. Experienced and core employees are what holds a company together.
Good companies recognize value in their workforce and do all they can to protect their assets.
If you want the economy to change, take AC's advice and go buy something you don't need today. I think I am going to go out and buy a new 16' x 32' commercial window pane for my patio door...

By: charliebrown on 11/14/09
I talked to laid off Viracon worker-over 20 years. They laid off alot of managers who had been with the company a long time.

We will never improve our job situation in America as long as CEO' & their management team make ungodly salaries and, as long as we quit making things here and buying from China. Families cannot support themselves working at the big box stores.

I would like to see the data to support the number, types of jobs & pay of jobs created that the administration is saying were created.

By: quinn on 11/14/09
CB, that is very true. However I don't believe what political party is in power has any baring on it. Cheap labor and outsourcing isn't new. We've done it to ourselves. You sound really familiar, CB.;)



By: secretsquirrel on 11/14/09
In plain English: Losing your job sucks.
The government is not who you need to look to for salvation. They are the ones who (collectively) got us in this fix in the first place.
To blame one man is delusional. Blame them all. Politicians sent us to Iraq when we simply could have taken out Hussein with one good Marine/SEAL/Green Beret team, a six pack and a .308. We have been mired in a billion dollar a day quagmire. Please do not look to government for answers. They have done enough for us already. That's not much different than an addict looking to his supplier to get sober. Not gonna happen… he’s just going to sell you more of ‘the good stuff.’

By: quinn on 11/14/09
Must be some patio door there, S. A couple of those and you might possibly turn the economy around alone. Did you mean pane or pain?

By: secretsquirrel on 11/14/09
LOL Quinn. Yeah, it's an awfully big tree I live in.
Probably 'pain' with those dimensions as I am a DIY rodent.

By: charliebrown on 11/14/09
quinn-I was not blaming the administration for the loss of jobs, I would like to see the data as to the jobs they say have been created.

By: secretsquirrel on 11/15/09
charliebrown: I read an article last week in one of the local papers explaining the "created" jobs for the school districts. The essence of it was that it's all mathematical BS. Besides, most of the "created" jobs are in the public sector anyway. It's nice to know that the government response to job shortages is to create MORE public jobs which will increases taxes even further on a population of unemployed people.
LOL This is simply too rich for words!

By: charliebrown on 11/15/09
SS-that was my point-

By: charliebrown on 11/15/09
I feel sorry for all those lost their jobs. It is a tough world out there now. I hope it turns around soon!

By: quinn on 11/15/09
cb, Don't misunderstand, I did not think you were. Thinking most of the jobs "created" in the last ten plus years are alot more low paying than the jobs they are replacing. Corporate tax cuts or Obamanomics the results are the same.

By: secretsquirrel on 11/16/09
Just picking up the thread you put out there cb - You are definitely on the right track
~SS~ (Master of the Obvious) ;)

By: budlight on 11/17/09
think positive ! nothing happens till a sale is made !

 
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