Hard reality for hardware manufacturing employees

2012-09-30T00:00:00Z 2012-09-30T23:58:04Z Hard reality for hardware manufacturing employeesBy Bowdeya Tweh bowdeya.tweh@nwi.com, (219) 933-3316 nwitimes.com
September 30, 2012 12:00 am  • 

LOWELL | The layoffs coming for workers at Ashland Hardware Systems may appear as a kick in the gut, especially as some are in the process of training their replacements.

Employees of Ashland Hardware, a division of the Atlanta-based Fortune 500 company Newell Rubbermaid Inc., were told Aug. 22 their nearly 218,000-square-foot manufacturing and distribution facility in Lowell would be shut down by March 31.

"Most people are pretty sad because they've have been there a while," said an employee, who asked not be identified, fearing retaliation for speaking to the media.

Officials say the closure is needed to help the company remain competitive, but some believe it's a sign globalization remains alive and well as local, state and national economies continue to limp along.

Ashland Hardware, 790 W. Commercial Ave., produces hardware for windows and doors. It supplies companies, including Andersen, Pella and Marvin. The employee said many workers are facing the additional frustration of training people from an underused sister facility in Monterrey, Mexico, which will assume the production work soon to be leaving Northwest Indiana.

Connie Bryant, Newell Rubbermaid's senior manager of public relations, said in a statement the closure was a difficult decision but was needed so the company could "compete effectively in an uncertain global economic environment."

With the Lowell facility's closure, marketing, research and development and other professional positions will move to Huntersville, N.C., which is the base of the brand's leadership team. Ashland Hardware's facility in Freeport, Ill. will assume distribution work.

"We’ve been proud to be part of the Lowell community for nearly two decades, and we appreciate the hard work and dedication of our employees -- but the fact is we simply no longer have the demand for the products made at this facility to justify keeping it open," Bryant said in a statement. "Our focus now is on supporting our employees as they transition."

With the closure, the company said the first job cuts will start in mid-November and there would be a net loss of 50 jobs at the non-union facility.

However, a veteran employee told The Times that number doesn't reflect the couple hundred jobs that have left the facility in the last few years. The employee said workers feel like they've been lied to because they've often asked managers about whether the facility would close, but were assured it wouldn't.

The employee said companies can't be blamed for wanting to make more money, but the announcement is hard to take at a time when the country can ill afford to lose jobs.

Ashland Hardware's announcement shows companies remain interested in moving operations outside of the United States to maximize their profit, said Surekha Rao, an associate professor of economics at Indiana University Northwest. The U.S. is not the highest-cost country in the world for inputs such as labor, but it remains significantly higher than many developing countries. The cost of employee wages, benefits and insurance in manufacturing was about $34.74 per hour in 2010, compared to $6.23 per hour in Mexico, the Bureau of Labor Statistics reported in December.

Rao said in addition to costs, companies interested in globalization need a supply of skilled workers who can meet productivity goals. If both goals are met and the jobs leave, "it's unlikely that they'll come back here," she said.

Manufacturing employment in the United States has steadily declined in the last half-century, which has hit manufacturing-intensive Indiana especially hard. But despite a drop from July, Indiana manufacturing employment -- 486,800 in August -- was at its highest level since December 2008, according to seasonally adjusted payroll data from the Indiana Department of Workforce Development.

In addition to offering transition services to its employees, Ashland Hardware plans to work with state and federal officials to access additional transition benefits and provide affected employees with separation pay based on years of service.

"We explored many options before reaching this conclusion, and it is no reflection on the hard work and dedication of the impacted employees," a company statement said.

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