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One of the last remaining shoe manufacturers in the state has notified its 110 workers that it is closing its doors for good at the end of the year.
Saucony Inc., which has a manufacturing facility named Hyde Inc. in the Bangor Industrial Park, told its employees Friday morning that it is too expensive to make shoes in Maine. Forty people were let go immediately, and the remaining 70 people will lose their jobs by Jan. 7. The layoffs represent 20 percent of the company’s total employees.
The retail store on Farm Road will stay open, said John H. Fisher, Saucony president and chief executive officer, in a telephone interview from his office in Peabody, Mass.
Saucony’s name now sits on the bottom of a long list of shoe manufacturers that is etched on the gravestone of a dying, traditional Maine industry. As with Dexter Shoe, G.H. Bass Co., Eastland Shoe, Etonic and Cole-Haan, among others, foreign competition is forcing Saucony to move on.
Its focus, like that of the other companies, now is on selling the shoes not making them.
“We look at ourselves as developers, designers, marketers and sourcers of our products today and not as manufacturers,” Fisher said. “We’re not unique here.”
Saucony develops athletic footwear under the Saucony and Spot-bilt brand names, casual footwear under the Hyde brand, and athletic apparel under the Hind brand. Since 1972, Saucony has used its Bangor facility as an assembly plant for its running shoes. Pieces of the shoes are made elsewhere, including by suppliers in Asia, and then the footwear is assembled in Bangor.
The Bangor operation is Saucony’s last manufacturing site in the United States, and now all of its footwear production will be done by Asian companies, Fisher said.
“It was a difficult decision to shut down the facility because of our long-standing relationship with the Bangor community and domestic footwear manufacturing dating back to 1906,” said Fisher in a statement. “This represents another significant step in our ongoing effort to streamline operations and better position Saucony for the future.”
Saucony, which is traded on Nasdaq, informed shareholders Friday that it will incur an up to $1.1 million after-tax charge to write down equipment and pay employee severance packages. One stock, SCNYA, was unchanged Friday at $4.81; the other, SCNYB, was down two cents to $4.50.
On Monday, Saucony told shareholders its third-quarter net earnings dropped more than 90 percent as sales slumped after the Sept. 11 terrorist attacks. Net income was $362,000, compared with $3.8 million for the same period last year. Net sales fell 30 percent to $31.5 million from $45.3 million.
While shoe companies have moved production overseas, thousands of workers statewide have lost their jobs. In 1983, more than 17,000 Mainers were working in the footwear industry. Now the number is about 4,400, according to the Maine Department of Labor.
Robert Neal Stearns of Kenduskeag didn’t know he would become one of those displaced workers when he walked through the company’s parking lot to the plant’s front door Friday afternoon.
Stearns, who is a janitor, said he had been called in to work early because he needed to attend a 1 p.m. meeting. He said he wasn’t told why he had to be there, but he suspected that management would not be giving its employees any good news.
Intercepted in the parking lot by a reporter, with a television crew nearby, Stearns was asked if he had heard about what was going on at the plant. More than an hour earlier, Saucony executives had sent out a press release nationwide to announce the layoffs.
Stearns said no. Then he was told the plant would be closing. His face dropped, and he became quiet for a moment.
“They had me come in early today for a meeting,” Stearns said. “I thought it might be something like that. Look at all the other shoe companies it’s been happening to. We were next in line. It was just a matter of time.”
As Stearns headed into the plant for his meeting, Melissa Bragg sat in her car waiting for her fiance, Brian Doughty, a night watchman and janitor. He was to be at the same 1 p.m. meeting with Stearns. A couple of hours earlier, Bragg, a shoe assembler, had been told she was out of a job effective immediately.
“I don’t know if it’s going to be different for him,” she said, wondering if Doughty would be losing his job right away or at the end of the year. “With us both gone, there’s no source of income.”
Bragg said Saucony had been slowing down its Maine operations for more than a month by cutting workers’ hours to about 20 per week.
Michael Umana, vice president for investor relations for Saucony, said it was unfortunate that some employees were finding out about the layoffs from reporters. He said the morning shift was notified at 11 a.m., and the afternoon shift was going to be told when it came to work. But because Saucony is a publicly traded company, the shoemaker had to send out the press release to notify investors after telling only one group of employees because the word was out.
“Timing is what timing is,” Umana said.
Employees will be given severance packages, and Saucony is trying to line up job training for the displaced workers, Fisher said.
The Maine Department of Labor, too, was not notified about the layoffs until Friday afternoon. As the day went on, though, Saucony officials finally connected with MDOL’s Rapid Response Team, which assists companies in setting up training programs for workers who are losing their jobs. Rapid Response also holds meetings with the employees to explain what unemployment benefits might be available to them from the state.
Ron Brodeur, a Rapid Response team coordinator, said he talked with Saucony officials about scheduling meetings for sometime next week. But, he said, laid-off workers should not wait for the state to help them. He suggested that starting Monday they visit state Career Centers to find out about job prospects, and that they should find out whether they qualify for unemployment benefits.
“Don’t wait. Do something. Take action,” Brodeur said. “That’s our message to them.”
The state, too, will be helping Saucony in its efforts to obtain certification of its employees under the Trade Adjustment Assistance Program, which is offered by the U.S. Department of Labor. If the company proves the layoffs were directly related to foreign competition, the workers could be eligible for additional training and extended income benefits from the federal government.
On Friday morning, Saucony officials notified Bangor Mayor John Rohman and City Manager Ed Barrett of the layoffs and the pending closure. Both said they were disappointed to hear about the loss of 110 jobs in the Bangor area, but they said it was not unexpected.
“It’s very disappointing,” Rohman said. “Obviously we’re not pleased about losing the workers. The shoe industry, as evidenced by Dexter and the others, is not an industry that’s growing.”
Barrett said the city wants to incorporate the availability of Saucony’s building in its business attraction efforts. Fisher, too, said Saucony hopes to find another business to take over the space and, it is hoped, to employ some of the people his company is laying off.
The facility will be marketed to light manufacturers, and to companies looking for warehouse and distribution space. The building is easily accessible from Interstate 395.
Businesses looking for space generally want either a building that can be put up quickly or a vacant space that is ready for use, Barrett said. The lack of available space in the Bangor area has been an obstacle to attracting business, he said.
Rohman agreed that the Saucony location is a good one that should be heavily marketed by the city to a growing business.
“We need to find someone more compatible with what’s going on in light industry and the markets of today,” he said.
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