MERCER COUNTY — The local economy continues to bleed jobs as two leading industries on Tuesday announced layoffs totaling more than 70 workers.
The latest layoffs have led two local economic advisors to peg Mercer County’s manufacturing unemployment rate at 40 percent.
Cattron Group International Inc. said it was laying off 32 workers at its Sharpsville operation while Salem Tube Inc.’s Pymatuning Township plant said it laid off 41 workers since February and more will follow unless business improves.
These are the latest in a series of layoffs that have whipsawed the local economy. Large industrial employers such as Wheatland Tube Co. and Duferco Farrell have been forced to undergo rolling layoffs which have hit hundreds of its workers.
Other companies opted to shut their doors forever such as Signature Aluminum in Sugar Grove Township. When the company folded the local plant in March it employed 280.
Mercer County’s unemployment rate in February, the most recent month when complete data was available, broke through the double-digit barrier at 11.1 percent. The rate was nearly a 16-year high and was well above the state’s 7.8 percent and national 8.5 percent jobless rates. A year ago, the county’s jobless rate was 6 percent.
While all sectors of the local economy have been hit by the economic downturn gripping the nation, none have been more severely crippled than manufacturing.
Manufacturing unemployment rates aren’t tracked by the Labor Department, but in surveying the industrial landscape Greenville Mayor Dick Miller sees bleak if not desperate conditions. Miller also is founder of Keystone Research which advises businesses and municipalities
“Local unemployment in all manufacturing is probably running around 40 percent. This is depression-era levels.’’ Miller said.
Larry Reichard, executive director of Penn-Northwest Development Corp. agreed with Miller’s estimate.
As head of Mercer County’s lead economic development agency, Reichard testified six weeks ago before a Pennsylvania House Commerce Committee that local manufacturing unemployment was running around 25 percent. Those may have been the good old days.
Reichard said that estimate was based on surveying the top 30 to 35 local industrial employers. When reviewing the latest unemployment data and in talking with small manufacturing shops the situation since then has sharply deteriorated.
“And unfortunately it’s getting worse,’’ he said. “There will simply be a considerable number of companies in this county that will not be able to hang on.’’
Once faced with trying to plug up layoff leaks wherever he could, Reichard now finds himself braving a waterfall of miserable economic conditions.
“There really isn’t a whole lot you can do,’’ he said. “We ask companies what we can do and they say ‘fill my order book.’ ”
Although he believes the local economy will improve, that likely won’t happen until next summer.
“I really think we’re in for a tough six to nine months yet,’’ Reichard said. “And I’m afraid you’re going to see more casualties along the way.’’
In all Cattron laid off 50 at its North American operations with the bulk seen at its local facility. Other layoffs were at the company’s Escondido, Calif., and Georgetown, Canada, operations. The layoffs represent a 14 percent employee reduction worldwide for the remote control products manufacturer.
“We have held off taking actions affecting our employees for as long as we could, but the depth of this global recession has affected our global customer base pretty deeply,’’ John Paul, president and chief executive officer of Cattron Group said in a news release.
Several employees took advantage of a voluntary retirement offer which reduced the layoffs. Further, the company trimmed work hours and pay scales to keep a maximum number of employees, Paul said.
Layoffs came in all departments including sales, services, finance, human resources and engineering, Donna Chapman, Cattron’s vice president of human resources said in a phone interview. The layoffs were effective Tuesday.
“If I were to forecast I would say these are permanent layoffs,’’ Ms. Chapman said. “If there’s a turnaround these employees would be considered for rehiring but we don’t want to make any promises.’’
None of the jobs are being transferred overseas, she added.
Supplying the industrial, mining, commercial mobile and railroad markets, the company has seen significant decline in the industrial sector — particularly automotive and steel.
Laid off employees were offered a severance package and a team from the Pennsylvania Department of Labor and Industry will be on hand today to help with outplacement services.
In a separate layoff action, Fred Prossen, chief financial officer for Salem Tube, wrote to the state Labor Department on April 23 that the company had laid off 41 workers since February and more could face the same fate.
Fred Prossen said in the letter the company saw a “dramatic and unforeseen reduction in orders for our products’’ totaling about 75 percent.
Normally, orders received by the company have a four to six week lead time, Prossen said, but recently distributors have cut the lead time to around two to four weeks. Distributors are Salem Tube’s primary customers.
Since Feb. 20 the company has laid off 35 union workers and six non-union workers, Prossen said. He added it wasn’t possible to give advance notice of the layoffs “due to the dramatic and unforeseen drop in orders....’’
While some of the employees returned to work, if orders remain severely depressed over the next several weeks more layoffs could occur between May 1 and May 14, he said. A hand-written comment on the letter said it would be eight employees scheduled for possible layoffs.
The existing and new layoffs are expected to be temporary and that some or all will be less than six months, Prossen said.
“However, if the unprecedented downturn in orders for our products continues, it is possible that layoffs may extend beyond six months,’’ he said.
In the letter Prossen said the company didn’t believe the action fell under the Worker Adjustment and Retraining Notification Act — better known as WARN. Under WARN a company with 100 or more full time employees are required to notify local and state agencies of major layoffs, usually 50 or more, along with plant closings. But the law gives leeway to businesses if they have an unforeseen or dramatic downturn.
However, Prossen indicated the letter was given in case any kind of notice was required.
Located at Reynolds Development, a few years ago Salem Tube employed around 130 but it wasn’t immediately known how many the tube maker currently had on its payroll.
Linda Horn, Salem Tube’s resource manager, said she was unable to comment and would refer questions to her supervisor. The supervisor did not return the message Tuesday afternoon.
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