Wenger lays off 13 more workers on Owatonna

By CLARE KENNEDY

ckennedy@owatonna.com

OWATONNA — Wenger Corporation laid off 13 more employees this month. Officials are hoping it will be the last layoff, though the nation’s economic recovery appears to have stalled.

Since 2008, the area’s manufacturing sector has suffered round after round of layoffs, first at Viracon, which laid off 370 people in December of 2008, according to a list tabulated by the Department of Employment and Economic Development (DEED). Next followed Truth Hardware, SPX, McQuay International, Cybex and Wenger.

However, mass layoffs have been far less frequent in 2010. The last major incident recorded by DEED happened in November 2009, when both Viracon and Wenger cut their payrolls — a measure that affected over 100 workers between the two companies.

Though Wenger is a large part of Owatonna’s manufacturing community, the company occupies a unique niche: They sell athletic and musical staging products to schools, colleges and universities. Their business is intimately tied to public funding — specifically, the revenue streams available to public schools.

“Schools get their funding from state budgets, and the governor had a (multibillion) funding gap. Education is 46.3 percent of Minnesota’s state budget,” said Bill Beer, the CEO and president of Wenger. “It’s tough to close that without touching education. So when they squeezed education funding, the first thing school districts try to do is protect teaching positions and programs. And what we do is furniture and equipment, so it’s kind of the second priority.”

Minnesota was hardly alone. Over the last fiscal year, 46 of the 50 states were struggling with budget deficits. Beer said that the company will likely see business pick up again in 2011 and 2012, after the economic recovery is back in full swing. Wenger is on a lag behind most of the consumer-driven companies because of its relationship to the public sector, Beer explained.

“As the economy improves, the state will collect more revenue, and when they collect more revenue, they’ll start filling in these buckets that they’ve been dipping into — one of them being education,” Beer said.

Nevertheless, Beer and other Wenger officials are confident that the company will come out of the recession stronger than before. The factory floor is still humming, Beer said. Traditionally this is Wenger’s busiest season.

“It’s not like the business is shut down, but we do expect it to continue to slow down,” Beer said.

On a whole, Minnesota is doing fairly well. DEED reported that in June, the state’s unemployment rate dropped to 6.8 percent — the lowest level since December 2008. In general, Minnesota is ahead of the U.S. at large, which showed a 9.5 percent nationwide unemployment rate for June.

Steele County’s recovery seems to be lagging behind many of its peers in the North Star State, however. Both the city of Owatonna and Steele County’s unemployment rates are taking a rough path down from peak levels in March of 2009 — when the city had an unemployment rate of 11 percent. As of June, Owatonna’s unemployment rate stood at 8.6 percent and Steele County came in at 7.8 percent, both increases over the previous month, but lower than June 2009.

All neighboring communities had lower unemployment for June: Rochester (with 5.6 percent), Northfield (6 percent) and Austin (6.1). Albert Lea and Faribault came close, with rates at 8.3 percent.

Clare Kennedy can be reached at 444-2376.

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Member Opinions: By: Bison09 on 7/31/10 A sad day for Wenger to lose so many good workers. Hopefully this will be the last time it has to happen. By: Racer on 7/31/10 Thank You, Wenger for the 22 good yrs we had. You all will make it through these ruff times. Marv By: secretsquirrel on 8/1/10 A good company that has been very generous to the community and surrounding areas. Everyone I know is pulling for Wenger and it's employees. Personal to LF at Wenger - Hope you are weathering the storm. Keep your humor and keep your faith my friend. By: Holidayguy on 8/2/10 It is just to bad they couldnt cut wages of the top officials and maybe lay off there instead of so many working people. By: RealityCheck on 8/2/10 Wenger's primary customers are publically funded schools and colleges. Private schools too, but its not enough to sustain their sales. With public budgets slashing, so goes Wenger. I hope Wenger corporate and their employees support strong school funding, as opposed to tax cuts. If not, they will prove Karl Marx right, and vote against their best interests regardless of what makes sense.
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