Residential construction downturn hits East Chicago plant

BY ANDREA HOLECEK, Times of Northwest Indiana
holecek@nwitimes.com

EAST CHICAGO | USG Corp., which already has scaled back production of building products to deal with the decline of the residential construction market, will cut 10 percent of its salaried payroll by May 1.

The company, which lost $28 million in the fourth quarter 2007, is offering severance packages to workers accepting buyouts. There will be involuntary layoffs if fewer workers than projected leave voluntarily.

The Chicago-based company's plant at 301 Riley Road here makes gypsum wallboard and joint compound for construction markets. The plant employs 150 workers, including a small percentage of salaried workers.

The cuts announced last week affect about 500 of the global company's 5,000 salaried employees, company spokesman Bob Williams said. Its work force totals 13,000.

"Any one location may or may not be affected," he said. "The biggest concentration of salaried employees is at our Chicago headquarters, where we'll see the biggest cuts. It won't be noticeable at our operations."

Many of the USG's production operations already have seen the impact of the residential construction market's dip that started in 2007, he said. However, Williams said company policy -- for competitive reasons -- prohibits him from identifying production levels at any specific plant.

"We closed the Boston plant, which was our oldest, and other operations were scaled back from the booming market of 2006 when we ran 24/7," he said. "Scaled back means they're not operating 24/7. Demand isn't there for the product."

The cutbacks could mean a plant has eliminated one or two shifts, reduced the number of its workers or cut their hours, Williams said.

"There's a wide variety of ways of adapting," he said. "When the market returns, we'll return to 24/7."

USG Corp. is a Fortune 500 manufacturer and distributor of high-performance building systems through its United States Gypsum Co., USG Interiors Inc., L&W Supply Corp. and other subsidiaries. USG serves the residential and nonresidential construction markets, repair and remodel construction markets, and industrial processes.