The impending closure of the Eldred Division of Ethan Allen
Interiors Inc., came out of the blue for the employees and the
union, who only learned two weeks ago that the company was
considering changes at the plant.
The facility will be closing March 6, according to a letter to
the McKean County Commissioners from Ethan Allen officials.
On Thursday, Ralph Lippart, Johnstown-based staff representative
of the United Steelworkers Union – which represents the employees
at the Eldred plant – spoke to The Era about the surprising
decision to close it down.
“The only clue we had was business hasn’t been good for months
now,” Lippart said. “There hasn’t been enough work to keep people
busy. There’s been layoffs. Everyone knew the company couldn’t go
on like that. But they gave us no warning at all.”
He explained company officials sent him a letter asking him to
meet with them to discuss the situation with the Eldred plant.
“The initial letter they sent me, it was dated Dec. 24,” Lippart
said. “I didn’t receive it until Jan. 5 because I was on vacation
the week after Christmas.”
Reading the letter, Lippart said, “We are seriously considering
the relocation of all work from Eldred facility. If it were to
happen, it would result in the closing” of that plant.
“It says they were considering the relocation and wanted to meet
to talk about it,” Lippart reiterated. “We went and thought they
were going to talk about ways it wouldn’t be relocated.”
That was not the case, he said.
“It was clear the company had already made the decision,”
Lippart said. “I went into the meeting fully expecting to talk
about whether we could take some kind of concessions to keep the
plant open. But the company … they did ask us if we had any ideas.
We said we didn’t have any of the company’s financial records, so
we couldn’t say what they could do to make it more profitable.
“We were fully prepared to bargain concessions to keep the plant
open,” Lippart repeated. “They didn’t want to talk about it.”
He explained that union members had been told a few months back
that there would be improvements at the plant to accommodate a new
line.
“They had maintenance people putting in a new transformer for a
new line,” he said, adding the maintenance workers were still
working on those renovations earlier this week.
“That’s how much notice we had.”
Lippart explained there are currently three upholstery plants in
the U.S. – one in California, one in North Carolina and one in
Eldred. When he met with company officials, they explained only two
would be kept open.
“What they said was because the volume of business has rapidly
declined, they felt they needed the plant on the West Coast” to
service the customers there, “and only needed one plant on the East
Coast. The plant in North Carolina is bigger than the Eldred plant
and just happened to have their orders done in roughly the same
time as the Eldred plant.
“They felt in best interest of the company to consolidate in
North Carolina,” Lippart said, adding the workers there are not
represented by a union.
He explained many of the 250 members of the bargaining unit at
the Eldred plant have been with the company for long periods of
time – 20 years or more, with some close to 40 years. When asked if
salary considerations could be a factor in the shutdown – since
longtime employees such as the ones in Eldred would earn more than
newer employees – Lippart said, “If they are thinking that, they
wouldn’t dare say it.
“They told us when I asked that it was not about labor costs, it
was about overhead,” he said. “I asked ‘How much business do you
have to do here to cover the overhead?’ They wouldn’t answer that
question.”
Lippart added that the company had done some hiring in 2007 and
2008, “mostly because of retirements and because they had closed
some of the other facilities and brought work into the Eldred
plant.”
He invited people to log on to Ethan Allen’s Web site to read
“the glowing reports about how well they are doing. The CEO (chief
executive officer Farooq) Kathwari got a million-dollar bonus for
doing so well. That would pay a lot of overhead costs.”
Gary Smith, vice president of Local 14040 of the union, said
that employees were initially offered 11 weeks of severance pay
based on years of service, but that has been increased to 15
weeks.
Smith added that workers were told they could fill out
applications for jobs at other Ethan Allen plants, but there is no
hiring now.
“I read in the media that a company official said, ‘We believe
that this action will improve the efficiency of our logistical
capabilities and strengthen our U. S. manufacturing operations.’ If
it will strengthen our U.S. manufacturing, why not close the China
and Mexico plants and allow the American workers in Eldred to keep
their jobs?” Smith asked.
(Era Correspondent Fran De Lancey contributed to this
report.)
