Armstrong May Lay Off More Lancaster Plant Workers

Lancaster, PA, Mar. 15--Another large layoff might be looming at the Lancaster floor plant of Armstrong World Industries, threatening an estimated 175 jobs, according to the Lancaster New Era. Armstrong has told employees that it might stop making commercial tile flooring there, due to weak demand and high production costs. Armstrong said it will decide the fate of the commercial tile department by the fourth quarter of this year. Production could stop as soon as 2005. If Armstrong does so, about 175 of the plant's 700 hourly and salaried jobs could be eliminated, a union official estimated today. The plant already has lost more than half its workforce over the past 15 years as production has been shifted to other plants, some of them overseas. In a letter given to employees last week, Armstrong executive Brian M. Carson wrote: "We are actively working to grow the tile business. However, if the business stays at current levels there is a strong possibility that Lancaster Tile would discontinue operations, as early as 2005 due to its high cost position. "No final decision has been made," wrote Carson, a senior vice president. Carson noted he has "authorized work to enable the (company's) other tile plants to develop the capabilities" to make the kinds of commercial tile that now are made only in Lancaster. "That would lead me to believe that commercial tile is leaving," said union leader Jerry Eshleman, "but I remain cautiously optimistic that it will stay." Eshleman said if commercial tile production ends here, Armstrong plants in Montreal and Kankakee, IL, probably would begin making the items that had been produced here. "There needs to be a great deal of concern, not only for the individuals who may be exiting the plant, but for the community at large," he said. Eshleman, president of United Steelworkers' Local 285, which represents about 530 production workers at the plant, said the local's members are highly skilled but older. About 380 of Local 285's members are age 50 or older, many on the brink of qualifying for retirement, he said. They would struggle to find jobs elsewhere that pay near their current average hourly wage of about $18.50, he said. And if quality jobs are lost at the plant, the community suffers too, because there's less money being spent on goods and services, he explained. Asked whether Armstrong has approached Local 285 about possible concessions that might reduce costs and save jobs, Eshleman said no. He added, "As usual, we'd be willing to sit down and discuss anything. We're ready, willing and able to sit down and try to save jobs here." An Armstrong spokeswoman today declined to comment on the Carson letter, saying company policy prohibits public comment on internal communications. Armstrong has been in bankruptcy reorganization since December 2000 to resolve 170,000 asbestos-injury lawsuits. At the same time, the maker of floors, ceilings and cabinets has seen its ongoing businesses falter recently. Last week, Armstrong reported its pre-tax operating profits (excluding charges for its asbestos liability) sank 56% in 2003. Contributing to that slump was the resilient flooring business (which includes the Lancaster plant). Its operating profits dipped 13% in 2003 after falling 9% in 2002. Demand for Armstrong's high-end resilient flooring--the kind made here--has ebbed in favor of lower-margin resilient flooring, plus wood flooring, Armstrong noted. The possibility of commercial tile production ending here surfaced after Local 285 officials obtained a document prepared for Armstrong by UAI Group, a Reading-based engineering firm. The November 2002 document, labeled "STRAT PLAN," calls for the plant to end production of stencil, commercial tile and Corlon sheet flooring, while continuing to make only one kind--rotogravure sheet flooring. Armstrong stopped making stencil flooring here in 2003, idling about 60 people, said Eshleman. But Carson, in his letter, said the document was not a firm plan but instead "only one of many scenarios that were analyzed." Carson and Armstrong CEO Michael Lockhart, in separate meetings with Eshleman, emphasized the same point, said the union leader. "Our current intention is to run and improve Rotogravure (a residential sheet floor) and Corlon (a commercial and residential sheet floor), although cost remains an issue for these operations as well," wrote Carson. "As we have done in the past, we will continue to aggressively pursue ways to lower our overhead costs at the Lancaster plant." Carson's letter did not elaborate. Yet Eshleman said the Lancaster plant can't match the lower costs of foreign Armstrong plants only by making concessions. Armstrong would need to add better equipment here and bring product lines in, not out, to generate economies of scale, he said. Without those moves, Eshleman contended, "we can't compete with imports from off-shore plants and still retain an American way of life."