By: Michael Lauzon
February 28, 2013
PAINESVILLE, OHIO — Custom injection molder Core Systems LLC has extended its shutdown to include its Painesville, Ohio, headquarters plant, according to local reports.
Core Systems closed its other molding plant, in Mount Gilead, Ohio, when major customer Whirlpool Corp. terminated its business with Core Systems on Jan. 24. Mount Gilead employees were notified Jan. 27 about the closure. About 73 hourly and salaried employees lost their jobs in the plant, according to a Worker Adjustment and Retraining Notification Act filed by Core Systems on Feb. 4.
“We have no recourse but to close the plant,” Core President Bill Loebbaka said in the WARN notice.
“At this juncture, we expect the [Mount Gilead] plant closure will be permanent,” Loebbaka said in the WARN notice. Whirlpool took Core Systems to court to force the firm to surrender Whirlpool’s tooling.
Whirlpool, of Benton Harbor, Mich., has not disclosed where it shipped the molds to have its parts made by another firm.
No WARN notice for the Painesville shutdown had been filed as of Feb. 28. Painesville, with a population of 19,563, is the county seat for Lake County, Ohio. It is located 30 miles east of Cleveland.
The Cleveland Plain Dealer reported Feb. 27 that the Painesville plant is closing. The shutdown will affect about 300 employees. The plant ceased operations Feb. 22, according to a report in the News-Herald in Willoughby, Ohio.
Whirlpool represented essentially all of the work in Mount Gilead. About 75 workers at the plant were represented by United Auto Workers Local 1802, according to the local’s president, Lisa Adkins.
“It’s a very bad situation,” Adkins said in a telephone interview.
Mitigating the closure was the hiring of some laid-off workers in other local industries at a Feb. 28 job fair. Workers such as injection press operators made an average wage of $11.15 per hour. Adkins said Core’s Painesville employees were not unionized.
Core Systems officials did not respond to requests for an interview. Loebbaka was quoted in the News-Herald as saying Core will be liquidated and its equipment and buildings will be sold.
Although Whirlpool pulled its work from Core Systems, Core continued a relationship with GE Appliances but Core’s bank, Wells Fargo, would not support the company as a continuing business.
Core Sytems countersued Whirlpool on Feb. 3, alleging Whirlpool misinterpreted an earlier performance agreement plan and actually interfered with Core’s efforts to adhere to the plan. The case is scheduled for trial by jury May 22.
Core was founded in 1997 when industry investors bought molder Encor Technologies in Mount Gilead, according to a market report issued by Plastics News. Core’s Painesville plant opened in 2001, a year before a Chicago-based group of investors bought the company.
Core has specialized in appliance parts for refrigerators, laundry systems and other major appliances. Its capabilities included injection and insert molding, design, parts and assembly development, tooling and prototyping, robotics and secondary services. At last count it had 99 injection presses, many of them all-electric.
Core Systems had estimated sales of $47 million for fiscal 2011 ended Sept. 30, according to the PN market report. Its annual sales were as high as $63 million in 2007 before the U.S. housing market collapsed and dragged down appliance demand.