Dal-Tile Trims NY Production
Olean, NY, February 16, 2006--According to report in the Olean Times Herald, Dal-Tile, within weeks, will be reducing its mosaic tile production by half, closing a kiln and also laying off at least 30 second-shift union workers.
The newspaper quoted plant manager Toby Mille as saying that the layoff is the second since early November because of high inventory remaining from slow sales and rising foreign competition.
By March 6, the Olean plant will shut down one of its two kilns “because of competitive issues,” Mr. Miller said in the article. Essentially, “We’ll be cutting production in half.”
After that date, the plant will run a full first shift and a partial second shift, Mr. Miller said. He did not disclose details on the number of union workers to be laid off.
However, Dick Lockwood, union president of Steelworkers Local 151G, said, “We’re looking at 30 to 40 to be laid off this time.”
Last November the plant halted its third-shift operations and laid off 50 workers, which reduced its payroll to about 210 employees.
Soon, “We’ll be at 60 to 65 percent of employment” compared to before the November layoff, Mr. Miller said.
The kiln shutdown is considered a temporary measure, Mr. Miller said. “The plant will continue at this (lowered) production level through 2006.”
After that, Mr. Lockwood said, “I hope sales rebound strongly next year.”
But currently, “We just don’t have the orders. It’s nobody’s fault here,” Mr. Lockwood said.
The union president said, “Free trade is hurting all of us.”
Similarly, U.S. companies elsewhere are finding it increasingly difficult to compete with foreign competitors paying lower wages, Mr. Lockwood said.
It’s not just the domestic tile industry that’s being impacted by the trade imbalance.
“Everybody’s being impacted by free trade,” Mr. Lockwood said.
The 80-plus workers laid off from the two furloughs will have recall rights for two years, the union president noted.
It was reported this summer that Dal-Tile Corp., in Dallas and its parent company, Mohawk Industries Inc., in Dalton, Ga., were developing a strategic plan for its ten manufacturing facilities in the U.S. and Mexico.
Initially, there was concern one of three Dal-Tile plants-- in Olean, Jackson, Tenn., and Gettysburg, PA--would be closed because the company was expanding a facility in Monterrey, Mexico.
Since then, Olean plant workers were told last fall Dal-Tile’s Tennessee plant will have operations cut by 50 percent.
On Oct. 19, Mohawk Industries announced net sales for the third quarter increased 11 percent to $1.69 billion from $1.52 billion for the prior-year period. Meanwhile, diluted earnings per share and net earnings for the third quarter of 2005 were $1.61 (4 percent below last year) and $108.6 million (4 percent below last year).
In commenting on the third-quarter results, Mohawk Industries CEO Jeffrey S. Lorberbaum said, “The effect of both Hurricanes Katrina and Rita has reduced our results in the third quarter as we previously reported. As our raw material supply chain has begun to bring production capacity back online, we are seeing cost increases and some supply disruptions.”
Additionally, “Natural gas, diesel fuel and gasoline prices have substantially increased in the quarter,” Mr. Lorberbaum said.
Related Topics:Mohawk Industries, Daltile
