Leviton flips switch
It's lights out at River Plant in the wake of U.S. housing slump

By Jerry Sena
A nationwide slump in new home construction has hit one of Ashe County's largest employers, Leviton

Manufacturing Company, and prompted the closing of one of its three local manufacturing plants, according to company officials.

The plant, located southeast of West Jefferson on N.C. 163, and known as the West Jefferson River Plant, ceased all production at the end of last year, according to Lou Lovelace, the company's vice president and general manager of North Carolina operations.

A statement released by the company on Tuesday afternoon said the plant had "suspended operations," and Lovelace said the plant could resume manufacturing if demand for its goods increased. But the grim outlook for any significant turnaround in the housing market made a restart unlikely in the near future.

"I think this is going to be a very severe housing downturn that's going to last well into next year," Lovelace said.

The plant had been preparing to retool for a new product line, he said, but the poor market made it unwise to make a major investment at this time.

"We had been clearing out that plant to develop and implement a new wall plate line," he said, "and it just became apparent that this is not the time to be making multi-million-dollar investments the way the housing market is right now. So we decided to just indefinitely suspend that project."

He said the company had been moving employees from the plant for more than a year in preparation for the new product line.

"The employment there has been declining as we've been relocating other lines out of that building in order to get ready for this wall plate project," he said.

Lovelace said roughly 31 employees were on the River Plant payroll at the end of February 2008 and all are on temporary layoff. The employees were being offered severance packages or the option to relocate to other North Carolina plants as positions become available.

He said no such positions were currently open at the other two plants in West Jefferson and Jefferson, though placement at the company's largest North Carolina plant, in Morganton, is more likely.

"Right now there would be more of them than there would be (relocation) opportunities available, so they would be on a waiting list to be called into an opportunity at another plant."

The severance packages were not finalized as of Tuesday and had not yet been shown to the employees.
"We will present it to all of them, so they will all have that severance option," Lovelace said. "This is a people-oriented company and the severance option is - I guess you'd say generous is a good word for it. I would expect that a high percentage of people will take it."

About four management positions had been affected by the layoffs with the remainder of the jobs comprised of skilled and semi-skilled workers.

Leviton's Ashe County employment roll has shrunk by 75 workers - from 525 in February 2007 to 450 in February 2008, Lovelace said. The 31 additional workers will bring that total to 419.

He added that the company had applied for federal Trade Affected Assistance (TAA) benefits for the displaced workers. He said he believed the employees would qualify for the funds which help to pay for retraining workers for employment in other career fields.

"The criteria as I understand it, is if product lines were transferred out of the country. And some of the lines that were there were transferred to a plant in Mexico going back to last year and event he year before," he said. "So, we can make the case that this plant was a victim of lines being transferred to Mexico."

The company manufactures a wide range of electrical and electronic devices in facilities around the world, many of which are not dependent on the new home construction market, a factor that has helped soften the blow to its bottom line.

"It's having a very dire effect," he said. "Maybe not as much as it once did because we're into a bunch of products that are not directly related to housing.

"But in North Carolina most of our products are directly related, so it's affected us quite severely," Lovelace said.

He noted that its Mexican plants had also been cutting back on its workforce.

"So, it's not just a North Carolina thing or a U.S. thing, it's any of the Leviton plants that are being affected by housing," he said.