Growth spurt ends for United Alloy
WCLO's Steve Benton reports on another Rock County business feeling the pinch of the economic downturn
JANESVILLE After eight years of continuous growth and six straight months of sales records, a Janesville manufacturer is the latest victim of a devastated national economy.
United Alloy, a maker of fabricated metal parts and components for the industrial and power generation markets, has laid off about 15 percent of its 103-person workforce.
In addition to the layoffs, the company has frozen wages, eliminated overtime and cut hours, and it will not fill new positions.
"Who would think—after six great months and another record year—this would happen?" said Terri Roessler, United's chief executive officer. "The power generation industry has hit a wall."
Specifically, United's largest customers hit a wall.
Cummins Power Generation, which accounts for about half of United's business, announced two weeks ago that it was significantly cutting staff and putting new product programs on hold.
Sales have dropped by about one-third at Morgan Corp., which makes up about 20 percent of United's sales. Magnum Products, United's third-largest customer, recently eliminated its second shift.
And Caterpillar, a top prospect for new business in 2009, announced last week that it would cut 20,000 jobs.
Roessler said first-quarter orders are typically lower than those for the preceding fourth quarter. But with a three-shift staff in place, monthly sales that recently approached $1.5 million have been cut in half.
"Our current order levels have, unfortunately, forced very difficult decisions, including layoffs," Roessler said, adding that United is now running two shifts at its plant on Kennedy Road.
Roessler staged companywide meetings Monday to discuss the layoffs and cost-cutting efforts.
"On the one hand, I've been our biggest cheerleader, talking up how well we've been doing," Roessler said. "Then I have to get up with news like this.
"It just rips my heart out."