Hubbardton Forge avoiding layoffs by reducing work week
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By Bruce Edwards Rutland Herald - Published: October 16, 2008
CASTLETON — Hubbardton Forge has come up with a creative way to avoid layoffs as it copes with a downturn in the national economy.
The maker of hand-forged decorative lighting and accessories announced Wednesday that it was reducing its work week and production "until retail markets recover from the shock of the financial news of the last few weeks."
In order to minimize the impact on employees' paychecks, Hubbardton Forge will pay employees an advance on a portion of their profit-sharing bonus which is usually paid at the end of the year.
In conjunction with that, the Castleton-based company has also applied to participate in Vermont's Short-Time Compensation program, which provides unemployment benefits based on reduced hours.
Hubbardton Forge officials announced the plan Wednesday at a company-wide meeting with its 250 employees.
According to the company, the combined approach of the profit-sharing advance and unemployment benefits will help workers retain most of their income.
Hubbardton Forge is reducing the number of hours worked by production workers and some other employees by approximately 20 percent, or eight hours a week. First shift production employees who now work a five-day week will work four days while the second shift will go from a four-day week to a three-day week.
Company CEO Ben Anderson-Ray said Wednesday while many companies would have resorted to layoffs faced with the same situation, Hubbardton Forge came up with a creative plan to avoid layoffs and preserve its workforce.
"The way we're doing it is putting programs in place that we believe will allow our employees to remain relatively whole in terms of their cash flow and making sure we're keeping our capacity in place," said Anderson-Ray, who joined the company last month.
He said the reduced work week would remain in effect until the end of the year. He also expressed confidence in the company's future, saying the situation was only temporary.
"We believe we're very well positioned to weather the uncertainty in the market right now," said Anderson Ray, who previously worked for GE Lighting, Black & Decker and Rubbermaid. "We have a lot of growth plans that are kicking in."
He added that the short-term cutback in hours will have no effect on plans to eventually expand to a 24-acre parcel in Fair Haven the company purchased last month.
While sales to date are slightly ahead of last year, the company began seeing a slowdown in orders in late summer. Anderson-Ray said that slowdown has accelerated over the last few weeks, coinciding with the financial crisis that has gripped the country.
Hubbardton Forge has a policy of sharing financial information with its employees as well as seeking their input on company operations.
Anderson-Ray said most employees were pleased with the approach the company is taking as a way to avoid layoffs.
The company also announced an increase in its sales and marketing efforts while focusing on product innovation.
In January, company officials will attend the annual American Lighting Association trade show in Dallas where Hubbardton Forge will introduce its largest number of new lighting products.
"The investments we make today in our product and our people is what will position us to return to our historically strong growth rates as consumers regain confidence in the financial markets," company co-founder and chairman George Chandler said in a statement.
The company has recorded double-digit growth over the past two decades.
Last year, Hubbardton Forge made Inc. magazine's list of 5,000 fastest-growing private companies. The company's revenues 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.
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