SHEA VAN HOY, Evening News
Shea.VanHoy@newsandtribune.com
Kimball Office will close the Borden manufacturing plant by April and cut jobs in a consolidation with its Salem headquarters, the company told the Indiana Department of Workforce Development on Monday.
Kimball expects nearly 80 workers out of close to 250 in Borden to be let go in the transition, which began in September, the company said in a letter required under the federal Worker Adjustment and Retraining Notification Act, or WARN.
About 75 positions lost will be hourly; four salaried positions will be trimmed at the two plants; and two or three salaried Borden employees will be offered different hourly positions in Salem, according to the letter from Todd Garrison, of Kimball's human resources department.
"Consolidating operations into one facility will position Kimball Office to better compete in the marketplace by better managing our overhead costs in relation to our actual sales in today's challenging business conditions," Garrison wrote. "Locating in the Salem facility allows us to leverage the more modern of the two facilities."
Hourly employees at the plants make an average of between $12.50 and $13 an hour, according to a September article by Business First of Louisville. Workers who are laid off will be offered a severance package of up to 26 weeks worth of pay, based on the length of employment with Kimball, Garrison said in a telephone interview this morning.
The initial hope was for Kimball to move all its workers to the newer Salem plant, said Marty Vaught, director of public relations for Jasper-based Kimball International, the parent company of Kimball Office.
"The economy changed that," Vaught said of the cuts.
Garrison said deteriorating sales because of tough times "forced us to make decisions we were reluctant to make. We're doing our best to communicate to employees what we know, when we know it as far as sales levels and the impact on them," he said.
"One of our highest priorities is maintaining a commitment to our people. We have a lot of longtime employees and we will continue to communicate and work with them."
The Borden plant - which makes traditional, ornate office desks, among other office furniture - is located at 555 E. Water St., also called Ind. 60, and the Salem plant, built in 1986, is about 15 miles away. The Borden location was purchased from Borden Cabinet Co. in 1952 by Jasper Corp., the precursor to Kimball.
Garrison said the company expects to house about 550 workers in Salem once the consolidation is complete. The Borden complex - which is in excess of 400,000 square feet - will be readied for sale, Garrison said. It's possible, but unlikely, business would rebound quickly and Kimball would again use the Borden plant.
Kimball International earned $2.18 million in the quarter ended Sept. 30, following two straight losing quarters, according to U.S. Securities and Exchange Commission filings. The company lost $46,000 in fiscal 2008, after earning $19.15 million and $15.36 million in the previous two fiscal years. Annual revenues are about $1.35 billion.
The office furniture market could be facing a rough couple of years. Trade group The Business and Institutional Furniture Manufacturer's Association in Grand Rapids, Mich., predicts a 1.8 percent drop this year and 11.6 percent next year in U.S. office furniture production on its Web site, www.bifma.com.