Published Friday, March 28, 2003
Herald Business Editor
Werner Co. announced Thursday it will fold its ladder and related lines from its Sugar Grove Township plant, resulting in 500 local jobs being axed by the end of summer.
The move wasn't unexpected. In recent days, word spread among workers that talks between the company and United Steelworkers had broken down over labor concessions. On March 5 the company said it began talks with the union about the possibility of moving the manufacturing operation to other Werner plants in the United States.
Werner said it had been mulling the move for some time because its largest customer now buys one-fourth of its ladders from Mexico, where hourly labor costs range between $2 and $4 and China, where labor costs are less than $2 an hour. The company has pegged its total hourly costs at the local plant at $29, which includes wages, benefits and insurance.
To make the local hourly costs competitive with other Werner plants, union workers would had to give back $11 an hour, said those familiar with the negotiations.
It was a figure too high to bear.
"I'm really disappointed it happened the way it did,'' said Phil DeMatteis, president of Local 3713. "From the get-go we can't compete with China or Mexico.''
DeMatteis said his goal now is to negotiate a good severance plan for departing workers. He urged union members to take advantage of any job- retraining programs that might be offered.
While he declined to express his own views, DeMatteis acknowledged many of his fellow union members believed the company had made the decision to close the ladder operations before negotiations began.
But the company said it held serious talks with union leaders to keep the jobs.
"We thought we were making progress,'' said Eric Werner, vice president and general counsel for the company. "We were surprised when that didn't turn out to be the case.''
Although Werner said the company didn't ask for specific concessions from the union, he acknowledged union leaders were shown labor costs at the local plant were $8 to $18 an hour higher than at its other facilities.
He also said the company was and continues to be profitable. Werner declined to say what the company's profits were last year. But, he added, the real issue behind this move was to remain competitive within an industry where more plants are being erected in nations where labors costs are well below those in American factories.
"Obviously, we're now in a global market place,'' Werner said. "This facility had very high labor costs that wasn't competitive with our other internal facilities and certainly not external.''
Workers reacted angrily to the layoffs.
Michael Steines said he was told the company pocketed $90 million in profits last year -- a figure Werner said he wouldn't comment on. An eight-year veteran, Steines said the company continually complained about foreign competition, health-care costs and workers' compensation.
"It's bull
-,'' the Sharon resident said. "A company that makes that kind of money and wants to make more money.''
Since the Werner family sold its controlling interest in the company in 1998 to Investcorp, the company's focus has changed, Steines said.
"All they do is look at money,'' he said.
Investcorp is an investment group of 10,000 Persian Gulf investors.
Employing a total of 1,050, 500 jobs will remain at the Sugar Grove Township plant, with half of those on its aluminum extrusion line, fiberglass pultrusion, remelt and extruded products fabrication and the other half at company headquarters located next door.
Losing their jobs are a total of 450 hourly and 50 salaried employees, but about 250 of them had previously been laid off for what had been called a temporary duration. Plans call for Werner to gradually wind down local operations by the end of summer. Equipment for ladder production and other operations will be moved to other Werner facilities but the company didn't say which ones might benefit.
Employing 2,300, Werner is a leading manufacturer and distributor of ladders, climbing equipment and ladder accessories. Its other plants are in Chicago; Aniston, Ala.; Carrolton, Ky.; and Merced, Calif.