Theis lays off 20 workers, eliminates third shift

Reporter Jackie Majerus wrote this story:

With orders declining in the troubled economy, Theis Precision Steel Corp. is eliminating its third shift and laying off nearly 20 percent of its union workforce, a company executive said Thursday.

Bill Ramaccia, vice president of finance and general administration at Theis, said the global financial crisis is taking a toll on Theis.

"We're responding to the current slowness in our sales, much like companies in this and many other industries," said Ramaccia, who said the company saw a 30 percent drop in incoming sales in October.

Theis has 104 hourly workers represented by Local 712 of the United Auto Workers Union. 

Of those, 20 will be laid off starting Monday, said Ramaccia.

Unlike a restructuring earlier this year that cost 30 union workers their jobs, Ramaccia said Theis plans to call this group of 20 back to the factory as soon as possible.

"We're very hopeful," said Ramaccia, who said Theis intends to use "a very aggressive" sales program to boost business.

But Ramaccia said it was "extremely difficult" to say when sales would be robust enough to bring the workers back.

"Things are still so uncertain," said Ramaccia. 

Ramaccia said the layoffs were needed, but that they weren't easy.

"These are very deliberative actions. These are not actions we take lightly," said Ramaccia. "We regret having to do that."

Zeke Zalaski, president of Local 712, said the jobs are mostly semi-skilled but also include some skilled workers. Most are earning $18 to $22 an hour, he said.

"They're very upset," Zalaski said, especially because the holiday season is beginning. "They lose their insurance as of the end of the month. They either go Cobra or head for Husky."

Layoffs will be done by seniority, Zalaski said and will include some who have been on the job for as long as 15 years. He said the company has promised to bring the workers back as soon as possible.

"They're committed that they're going to call all these people back once the orders start up again after the first of the year," Zalaski said.

In the meantime, the union is trying to get help for the laid off workers from the state Department of Labor with unemployment, health care and other assistance.

"The people are scared. There's layoffs all over this country," said Henry Raymond, a union steward at Theis. "Everybody's on edge. It's very hard. The company's in a bind. The union's in a bind. We pray that it's only temporary."

Zalaski said everyone understands the situation and how fortunes are tied.

"We're all in it together," said Zalaski. "There's not much animosity between us anymore."

Both union and company officials said the company is solid and not closing.

"In the last three months, they've made money," said Zalaski. "The place is turned around."

Through its German parent company, Theis invested $1 million into a program to boost productivity.

"You don't spend that kind of money if you're thinking of closing," Zalaski said.

Ramaccia, who has served as the company's chief financial officer for 22 years, said the extensive program ran from March until June. It was a serious restructuring to improve Theis for the future by building revenue, controlling costs and improving productivity.

"They are pushing the guys a lot harder than they used to," said Zalaski. He said productivity is definitely up.

During the restructuring, Ramaccia said, three or four salaried workers were laid off, as well as 30 union workers.

After the layoffs Monday, there will be 84 union and 33 salaried employees, which include sales positions, Ramaccia said.

The current global economy challenges workers with constant changes, according to Ramaccia. People have to come to work prepared to do something different each day, he said.

"We saw a very marked slowness" in sales in October, said Ramaccia. He said the "sharp decline" in the automotive and housing industries had an impact on Theis, which he said is a "middle market manufacturer."

Theis buys coils of steel and customizes it for buyers, rolling, thinning, and cutting the metal to a specific thickness and hardness.

Customers that used to order a year in advance are no longer doing that, Ramaccia said, making planning and advance purchases difficult for Theis.

The customers are giving "very little definitive" information about what their future orders will be, Ramaccia said.

Zalaski said customers are pushing back orders until after the first of the year, creating a slowdown in work.

And besides the advance sales in limbo, Theis is seeing very little in the way of spontaneous orders, Ramaccia said.

Slowdowns in sales have happened before, said Ramaccia, but in this economy, it's different.

"In the past, we used to try to wait for sales to catch up," said Ramaccia, but he said Theis can't do that anymore.

Raymond, who has worked at Theis for 25 years, said the company had more than 200 union workers when he started there and ran three shifts, seven days a week.

He's never seen things this dire, said Raymond, because this economic crisis is of global proportions.

"Nobody's safe in these times," Raymond said. "We never went through this before."

Zalaski said Theis sold off some "real old furnaces" for scrap and has been sprucing things up inside. He said it's for the customers who thought the place "looked like a dungeon," said Zalaski. "It's not to sell it."

He's seen this before, said Zalaski, at Associated Spring, which shares Local 712 with Theis workers.

Associated Spring, which does 70 percent of its work for the automotive industry, Zalaski said, laid off a dozen people about two months ago, due to the economy. There are now 86 union workers at the downtown factory, he said.

Zalaski, who won the union presidency post in June, started at Associated Spring 30 years ago. At the time, there were 600 workers there, he said. Just six years ago, the number was at 225.

"It's constantly gone down," said Zalaski.

Union workers at Associated Spring took a five year wage freeze last year to protect their jobs, Zalaski said.

Theis workers did the same for a three-year contract that started in 2006, and last year, Zalaski said, Associated Spring did a little sprucing up inside its plant like Theis did recently at its Broad Street factory.

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