Depth of Schulman cuts rocks Bellevue

BELLEVUE Workers at A. Schulman in Bellevue knew layoffs were coming. A week or two a
Cory Frolik
May 24, 2010

 

BELLEVUE

Workers at A. Schulman in Bellevue knew layoffs were coming.

A week or two ago, they were told by management to expect a big announcement Dec. 10. Everyone guessed correctly that the announcement would be about trimming the payroll.

What they didn't know was just how many employees would be fired.

Company officials confirmed Wednesday that 34 employees at the Bellevue plant -- 9 salaried and 25 hourly -- will be fired by April 2009.

"We knew they were going to happen, but not at that magnitude," said one longtime employee, who spoke on the condition of anonymity.

Eight of the salaried positions were eliminated Wednesday.

Those eight employees walked into work at the Bellevue plant that morning with a salary and career. Within hours, they were escorted out, joining the ranks of the unemployed.

They will soon have plenty of company.

Before Wednesday, the Bellevue plant had 109 employees -- 77 hourly and 33 salaried. The hourly employees are union members; the salaried employees are not.

After all the reductions take effect, 51 union and 24 non-union employees will remain at the Bellevue location.

The layoffs will be done in phases, with the next round of cuts expected in January, according to several employees.

The job losses are a result of A. Schulman restructuring its operations in the U.S. The weakening economy and collapsing automotive market are to blame, company officials said.

The automotive portion of A. Schulman's operations -- the plants in Bellevue and Nashville -- are losing about $1 million a month, president and CEO Joe Gingo said.

The company's other two plants, which are in the packaging business, are doing well.

"On the automotive end of this business, this company has lost money for several years in a row," Gingo told the Register. "It's the only part of my business that is losing money."

In Bellevue, the company is idling two manufacturing lines and shutting another line down completely, company officials said. Four main production lines will remain in operation.

The Bellevue site is a plastic compounding plant, which makes plastic pellets that are injected into molding machines, an employee said. The pellets are sent to car makers to be turned into dashboards and other parts.

But car and truck sales have plummeted in recent years. A. Schulman officials said the sharp decline in vehicle sales forced them to close one of their automotive plants in St. Thomas, Canada, last year.

Gingo said no one imagined the automotive market could decline further. But it did, and A. Schulman had to make more cuts.

"We lost $12 million to $15 million last year. We anticipated actually breaking even this year with the closure of St. Thomas. But with further deterioration in the market, we would be anticipating still losing -- at $1 million a month -- $12 million," Gingo said.

One Bellevue plant worker said it was no secret the automotive arm of the company was in deep trouble. The worker said a lack of leadership and foresight explains why the company is in this mess.

"This was extremely poor management. We've been hemorrhaging money for 10 years, and no one has been held accountable," the worker said. "We needed to get out of strictly automotive (plastics) probably about eight years ago. We didn't learn a thing. We were doing the same thing that Ford, Chrysler and GMC were doing. We were just sitting there."

Another longtime employee at the Bellevue plant -- who also asked for anonymity -- said the head count has shrunk in recent years. There used to be more than 30 salaried employees and more than 150 employees in all.

The employee seems to think the layoffs are just a sign of the times.

"It's hard, man -- it's just all over. You watch the news and every day it's something else, something else, something else," he said.

Watching eight employees lose their jobs Wednesday was tough, the employee said. One was his friend and a good worker. He didn't deserve it.

But Gingo said A. Schulman cannot afford to continue losing money hand over fist.

"Listen, I know how difficult it is, and I really regret the action we had to take, but we honestly had no choice. You can't lose $12 million a year and stay in business," Gingo said. "This is awfully hard on the people it affects -- and don't think we don't understand that. And these people were hard workers, and they did a good job."

Good job or not, Gingo said a forecasted 30-percent drop in U.S. automotive sales next year meant A. Schulman had to act quickly.

More cuts are not planned but always possible, company officials said. It all depends on the auto market.