Kevin Spradlin
Cumberland Times-News
Sat, May 17 2008
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CUMBERLAND - Citing global competition and a weakening U.S. economy, Biederlack furloughed local workers for a second time since December.
Between 50 and 60 workers had been laid off around Christmas. Some of those employees had been recalled in February. About 50 employees, working in administration and production, remain - down from a holiday work force of around 120 people. The fallout is causing Biederlack to "restructure the company going forward," said Peter McCabe, president of the blanket manufacturer.
Two deals - one with Wal-Mart and another with Sam's Wholesale, a division of Wal-Mart - didn't pan out as expected, McCabe said.
"I would say as recently as three weeks ago, we were very confident that we would have a significant Wal-Mart program and it really just sort of fell apart in the last seven to 10 days," McCabe said. "It comes as a shock and a total surprise (to) go from a significant program (in 2007) to zero in a matter of days. I've been doing this for 25 years and have been through some ups and downs, but this is as devastating as it gets to our business."
Previous contracts with both retailers, McCabe said, had been "deemed to be successful programs" by the retailers themselves. He said the company was confident enough of the two new programs that it bought raw material for future orders.
McCabe said a meeting in New York with Wal-Mart officials in early February was promising.
"We felt there was a program," McCabe said. "It just sort of evaporated."
A news release issued Friday noted that "the company plans to remain in Cumberland after transitions in the manufacturing segment of the business have been completed."
The statement begged the question of whether Biederlack would consider leaving Cumberland. McCabe said the statement served as "reassurance to the local population and county officials" that the company would remain - for now, at least. Because the situation was brand new, McCabe couldn't provide much detail on what happens next.
Losing the two contracts was a "shock to the system," McCabe said. "We have to then sort of figure out what we're going to evolve into, how we're going to restructure the company going forward. What kind of company will we be?"
He said he wasn't sure Biederlack, in Cumberland since 1979, would focus on manufacturing, sourcing, distribution or design - or a combination of those aspects of the industry.
"I don't have a quick-fix answer," McCabe said. "At one time we dealt with every major retailer in this county from Cumberland. When you find these people go overseas for everything and they cut you out, you have to reposition yourself in some way. We're still evolving that position."
Nationwide, McCabe said downsizing is a trend in the home textile industry. On the same day Biederlack made its announcement, The Associated Press reported a nationwide job loss of 63,000 in February after 22,000 jobs were cut in January. McCabe said he's spoken with other corporate leaders and "they're all facing similar problems."
"It's global competition," he said. "We can't compete and manufacture here. Boy, I wish I knew what the answer was."
Matt Diaz, economic development director for Allegany County, said it seems "very unusual" for a large retailer like Wal-Mart to react to the economy in such a way.
"Seeing them react that way signals big problems in the national economy," Diaz said.
Diaz said while "it's terrible" when people lose jobs, he feels that there are comparable job vacancies in the manufacturing industry. Schroeder Industries LLC, a hydraulics filtration products manufacturer and distributor located at the North Branch Industrial Park, is in the midst of an expansion. So is Superfos Packaging and Hunter Douglas Northeast.
Contact Kevin Spradlin at kspradlin@times-news.com.
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