By ED BARNA Herald Correspondent BRANDON When a new management team laid off 27 of the 107 Vermont Tubbs Furniture employees on Friday, the decision came as a shock to many of those affected. Anonymous employee reports put the job loss total as high as 35. Some wondered if it was an effort to cut costs by targeting older, more experienced workers. But according to Jon McNeill, the chairman of Vermont Quality Wood Products (doing business as Vermont Tubbs Furniture), the company did not have either the raw materials or the customer orders for that many employees. Actually, he said, having 80 employees was too many, except that they want to be ready to fill new orders when they come. For the past two months, he said, the bank that had forced William Carris to sell or close Tubbs had actually been running the facility. Rather than go through federal bankruptcy, they decided to use a procedure possible under many state laws (including Vermonts) called assignment of benefits for creditors. This is kind of a state-level bankruptcy, McNeill said. The bank hired a specialist in liquidating companies, and had him appointed trustee, believing Tubbs would not be sold. The trustee stopped taking new furniture orders, McNeill said. Meanwhile, the plant was using up the existing stock of raw materials to fill old orders. So the new Vermont Tubbs is beginning a restart with very little flowing through the factory, he said. The laid-off employees will be told when increased production calls for rehiring, and will have first dibs on those jobs, McNeill said. For many, there may be money coming from their share of the Employee Stock Ownership Program that Carris set up in 1995. By the time Tubbs was sold, this had reached 43 percent of the ownership, according to Carris. On Monday, Carris said that for those who had invested, their proportional payoff will depend on the valuation of the company. The agency that oversees ESOP plans uses a firm that specializes in such company valuations, he said. The valuation used to distribute shares of the old Tubbs will be made next year, and valuations for as long as five years might be used, Carris said. Also, financially the payments depend on a number of things, such as how much cash he has available, he said. McNeill said a key to the plants future is something originally called the Toyota production system or lean manufacturing. One sign of their seriousness about transforming Tubbs into a highly successful business, he said, is the presence of Fred Musone, the new head of operations, one of the countrys top experts in lean manufacturing. McNeill said Musone had been head of Morton International, which made airbags for Toyota. Musone has a strong track record with big companies, McNeill said. Now he is looking forward to showing how the system can work in a small company. But you dont just come in and drop stuff on people, McNeill said. They have to know why they have to change, so educational sessions will be a big part of the Tubbs restart, he said. A key to efficiency and quality in Toyotas method was employee involvement. Their ideas were valued, not only as individual suggestions, but also through scheduled brainstorming sessions. McNeill said such employee involvement is indeed a goal for Tubbs. Former president Lee Houston had begun that, and plant manager Serge Cotnoir did a great deal of cross-training, he said. Its really people-driven, he said. Its the opposite of trying to replace as many people with automated equipment. I will put as many people into the process as possible, because people are always faster than machines to change, he said. The first step in the Tubbs restart was very emotional, McNeill said. But employee empowerment continues to be part of the factory, he said. Once the conversion process takes place, the bottom line is, the people of the plant can manage themselves, he said. They can manage quality. They can design work flow. But we have to be very careful how we start, he said and that meant layoffs.