Home starts and remodeling force InSinkErator into layoffs

By Michael Burke
Journal Times

Thursday, December 4, 2008 8:52 PM CST

RACINE — InSinkErator, hurting from a stagnant housing industry and shrinking remodeling sector, has announced a 50-worker layoff.

The latest trimming of its work force will consist of about half temporary, or agency, workers, and half permanent employees, company Vice President of Human Resources Drew Abram said Thursday. Employees were notified late last week.

The permanent employees, all production workers, will have recall rights for up to three years, he said. “If (sales) stay flat, I would expect all of those people would be called back within six months to a year,” Abram said, to replace others who leave.

Altogether for the year, the garbage disposer manufacturer will have 102 fewer employees by Jan. 1, when the layoff should be completed, Abram said. InSinkErator’s total employment reached 1,200 to 1,300 a couple of years ago and is now at about 1,000.

All but 20-25 of this round of reductions were either temporary employees or made through attrition, he added.

“We’re tied closely with housing and remodeling,” Abram explained, and said business has slackened since about 2006.

InSinkErator, 4700 21st St., consistently uses temporary workers to handle the ebb and flow of the company’s seasonal business, Abram said. Spring, when much housing construction begins, is slower. Fall, when houses are nearing completion, is busiest for InSinkErator, a division of Emerson Electric.

“Ours (garbage disposer) is the last thing to go in the house, along with the dishwasher,” he remarked.

Remodeling suffers

InSinkErator President Jerry Ryder said sales have been hurt by both the lack of new housing starts and a decline in home remodeling.

Historically, he said, remodeling projects are fueled by home equity credit lines. But home equity has disappeared for many homeowners, some lenders have reduced borrowing limits and/or raised rates or curtailed home equity credit lines in other ways.

As one small example, Educators Credit Union recently started requiring an appraisal instead of using assessed value, ECU President Gene Szymczak said Thursday.

Ryder said InSinkErator’s garbage disposer replacement business remains steady, and the company has made some inroads overseas. International sales have grown by double digits, but that’s a smaller piece of the pie than domestic business.

“We’re faring better than the overall housing industry,” Ryder said. “But nonetheless, we are seeing a significant impact to our business.”

Asked if this will be the end of the layoffs, Ryder said he could not be positive. “We look at ‘09 as being as difficult, or potentially more difficult, than ‘08,” he said. “Some of the moves are in preparation for ‘09.”

But if next year is worse than projected, he said, “All bets are off.”

“Overall, the company is strong, we have continued managing our cost structure, and we’ll do that as best we can,” Ryder said.

“Unfortunately, in that process, there’s a human equation. ... This is not a fun thing for us.”

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