Lamp maker cuts jobs
Toolbox
BY Bruce Edwards Herald Staff - Published: January 13, 2009
CASTLETON — Hubbardton Forge had hoped to avoid layoffs, employing a shorter work week combined with a creative package that allowed workers to retain most of their income.
But faced with a decline in first-quarter orders, the maker of hand-forged decorative lighting products laid off seven workers last week and eliminated three other vacant positions.
Hubbardton Forge CEO Ben Anderson-Ray said Monday production management, finance and human resources jobs were eliminated.
"We've watched the progressive deterioration of the economic climate," Anderson-Ray said, "and while we finished 2008 off by only about 3 percent we also saw a fairly precipitous drop in fourth quarter orders and in particular in December."
He said that also led the company to revise downward its forecast for first-quarter orders.
To keep the company's costs in line, Anderson-Ray said it became necessary to streamline some of its operations and eliminate a total of 10 positions.
The company employs 250 workers.
He said the company is putting together a severance package for the seven workers. The package includes wage continuation based on years of service, outplacement service and their 2008 profit sharing, which is approximately 15 percent of their base pay.
"The overall package the individuals are receiving is fairly significant," Anderson-Ray said.
He said the company has worked tirelessly to avoid layoffs using a creative approach that has worked well through the fourth quarter.
The company announced in October that it was reducing its work week by 20 percent. To cushion the blow on workers' paychecks, Hubbardton Forge paid employees an advance on a portion of their 2008 profit-sharing bonus. Coupled with that, the company participated in Vermont's Short-Time Compensation program, which provides unemployment benefits based on reduced hours.
Taken together, the company said the two-pronged approach, which continues through January, allows workers to retain most of their income.
But Anderson-Ray said on Monday while the creative approach to coping with the slump in orders has been successful, it is only a temporary fix and is not a long-term solution.
The company will have a better handle on its future business following this week's American Lighting Association trade show in Dallas, where the company is introducing its largest selection of new lighting products and designs.
Asked about additional layoffs, Anderson-Ray indicated the outcome will depend on its future order volume.
"We're going to be monitoring our orders," he said. "We're going to be monitoring how our Dallas market goes and all future decisions will be based on the results that we're seeing."
The Castleton-based company has done well over the years in the upscale lighting market, recording double-digit growth over the past two decades.
In 2007, Hubbardton Forge made Inc. magazine's list of 5,000 fastest-growing private companies. The company's revenue increased from $18.3 million in 2003 to $30 million in 2006.
The company's primary customers are lighting showrooms and contract dealers around the country as well as catalog companies including L.L. Bean.
Contact Bruce Edwards at bruce.edwards@rutlandherald.com.
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