A decision by the U.S. Postal Service to postpone buying new plastic pallets until 1997 is bad news for about 90 employees laid off from TriEnda Corp., a major supplier. TriEnda and two other companies - Cadillac Products Inc. of Troy, Mich., and Shuert Industries Inc. of Sterling Heights, Mich. - split the most recent major order for thermoformed plastic pallets supplied to the Postal Service. That contract, awarded in early 1994, called for 605,000 pallets.
It was the biggest single-year order by the Postal Service for plastic pallets.
TriEnda, a thermoformer in Portage, Wis., picked up more post office work in the fall of 1995, when the company received an experimental design contract to make 200,000 more pallets with a new design to improve stiffness
But this year the Postal Service does not plan to buy plastic pallets, according to Paul Seehaver, manager for mail transport equipment.
That hurt TriEnda more than the other two thermoformers, because the postal contract accounted for an ``overwhelmingly large share'' of TriEnda's current pallet business, according to a news release the company issued when it announced the layoffs.
Still, the long-term outlook for plastic pallets at the Postal Service remains bright.
Since it began buying plastic pallets in the late 1980s, the agency has purchased more than 1.2 million of them.
Seehaver said the Postal Service remains fully committed to plastic pallets: ``We have no plans to get back to wood.'' But the nation's mail service is taking a one-year break from buying new units so officials can assess its needs and the newly designed plastics pallets, he said.
Cadillac and Shuert also are working on the new, stiffer design.
The Postal Service is in the process of awarding contracts to those two companies, for about 250,000 pallets each, Seehaver said.
He said all three companies will be pre-qualified suppliers for the next major contract, which he anticipates will come in January 1997.
It will be a multiyear contract. Until now, the contracts have been for one year with an option to extend.
The goal is to provide a steadier demand to help manufacturers forecast production, he said.
Spokesmen from Cadillac Products and Shuert Industries said the lack of a 1996 contract has not affected their companies significantly.
TriEnda laid off the employees in late March. Most of those laid off are hourly workers, said Tom Drury, vice president of quality and human resources. TriEnda had employed 321 before the cuts, he said.
``We're really making a full-court press here to do everything possible to minimize the pain of people losing their jobs,'' Drury said.
TriEnda is supplying company-paid health insurance and has hired a firm to help workers find new jobs.
Drury said the company has contacted local processors, including competitors, to help find jobs for those who were laid off.
Plastic pallets have proven to be much longer-lasting than pressed-wood pallets, which they are replacing.
Ironically, that durability is one reason the Postal Service decided not to buy more this year.
``Because they made such a high quality of product, they are lasting longer than usual and we don't need as many of them,'' Seehaver said.
Cadillac Products redirected pallet production into commercial markets, especially grocery pallets, according to Bob Williams, chief financial officer.
A Shuert Industries spokesman said the thermoforming company is diversified into several markets, and that the company has not had to reduce employment because of the Postal Service decision.
Drury said TriEnda is financially healthy.
Projections show domestic plastic pallet sales are expected to nearly quadruple in the coming year, he said.