Several makers of plastic building products are shuttering plants and slashing workforces in a cost-cutting effort that mirrors the actions of employers throughout the United States that are hunkering down in the face of what many believe could be a long recession.
Insulfoam, the nation's largest manufacturer of block-molded expanded polystyrene insulation, shut down two plants one in Anderson, S.C, and the other in Marlin, Texas.
Company officials did not return several phone calls seeking comment. According to a local news report in Marlin, 40 workers were laid off there.
``Both locations were heavily invested in the residential segment of the construction industry and current market dynamics have significantly affected their performance and profitability,'' said an Insulfoam news release.
Tacoma, Wash.-based Insulfoam is a division of Charlotte, N.C.-based Carlisle Cos. Inc., which also will close and merge several other nonplastics operations throughout the country, the company announced Oct. 21.
Vinyl window makers Silver Line Building Products and Milgard Windows announced layoffs and plant closures as well.
Milgard, also based in Tacoma, will close an 80-worker fabrication plant in Marysville, Wash., and move some of that capacity into its extrusion facility in Tacoma.
Silver Line, the nation's largest vinyl window manufacturer, which is owned by Bayport, Minn.-based Andersen Corp., will lay off 428 people when it closes its window and patio door plant in Durham, N.C., effective Dec. 20.
``It seems that what really started out a couple years ago with a decline in housing has escalated into a global financial crisis,'' said Andersen spokeswoman Maureen McDonough in an Oct. 23 telephone interview. ``We need to align our manufacturing capacity with anticipated volume. And it's just not there.''
Plant closings and layoffs aren't confined to the construction market. The Department of Labor announced Oct. 22 that the mass layoffs defined as more than 50 at a time in September made up the highest one-month total since September 2001, following the terrorist attacks.
Tim Dvorak, a financial adviser with Wachovia Securities, said the current state of the economy is a continuation of the economic hardships felt after the tech bubble in 1999-2000 and, more specifically, Sept. 11, 2001.
``The stock market bottomed out on Oct. 9, 2003. There is some thought that the recovery in the economy was an aberration, and this is just a continuation of, we'll call it Sept. 11,'' Dvorak said in an Oct. 24 telephone interview.
The economic growth was a reflection of the free flow of credit, he said.
``People were living off their credit cards and getting credit very easily,'' he said. ``This created a false demand for good and services, for automobiles, for new housing construction, and a false demand for financial products generated by Lehman Bros. or Goldman Sachs or Merrill Lynch.
``All this demand for product and this free flow of credit allowed these companies to expand. They had to hire more people.'' And now that the bottom has fallen out, those workers need to be let go.
``We were built on a house of cards,'' Dvorak said. ``People spent money they didn't have.'' The days of free credit are over, he added. Fiscal restraint and a tougher credit market will be the theme moving forward.
``This is not necessarily a revolutionary change,'' Dvorak said, ``but it's certainly evolutionary in terms of our economy moving forward.''