Mohawk to close

WAYNESBORO — In from the frigid morning air, employees at Mohawk Industries caught a second cold shock early Monday when officials informed them that they will be without jobs by the end of the year.

The carpet-backing plant will close Dec. 18, employees said, leaving 120 without jobs.

“To come in on a Monday morning, they hit you with it at 7 a.m.,” said 17-year plant worker Cathy Dofflemyer, of Waynesboro. “It’s just hard.”

The company released a statement saying the plant on 901 S. Delphine Ave. will close. Officials could not be reached for comment.

Dogged by the continued slump in the housing market and dwindling demand for carpet, Mohawk eliminated 40 Waynesboro jobs in August, on the heels of 73 layoffs in January. Companywide layoffs surpassed 1,000 in 2008. The company news release explained the closure as “driven by the necessity of aligning production capacity with market demands.”

Although city officials said in January the company was not planning to close, employees said layoffs and reduced hours didn’t bode well.

“We had a sneaking suspicion,” said Brandon May, 25, of Waynesboro.

After six years at the plant, May will look for another way to support his wife and two kids.

“Look for something,” he said. “Hopefully find something.”

The plant closing means a further reduction in machinery and tools tax revenue to the city, where manufacturing continues to slide.

“It’s bad news for the city and it’s even worse news for the employees that are going to lose their jobs,” Mayor Tim Williams said.

“It’s going to be a tremendous loss to our city,” Councilwoman Lorie Smith said. “This is something that is certainly going to demand analysis.”

City revenue figures point to reduced machinery and tools tax assessments for Mohawk’s 27-acre site each year since the company bought the former Wayn-Tex facility in 2005. The city in 2008 assessed tax revenue at $58,000 from Mohawk, down from $64,000 in 2006. Revenues decline unless companies add new equipment or increase assets, said Don Coffey, city commissioner of the revenue.

City officials said retail revenue has offset some industrial reductions.

Although the largest flooring producer in the world, the drop in new home construction and corresponding lack of carpet demand has challenged Mohawk, said Kemp Harr, publisher of Floor Focus Magazine. The carpet market is down about 35 percent since its peak in 2005.

“It’s not declining any worse, but it’s not getting any better,” Harr said.

Mohawk, a publicly held company, lost $1.5 billion in 2008 and another $60 million in the first six months of this year. Second-quarter earnings were down 46 percent compared to the same period last year.

Mohawk’s stock dipped below $20 per share in March but has traded above $45 since late July on the New York Stock Exchange. The stock closed at $49.96 today.

In a filing last year with the Securities and Exchange Commission, Mohawk chairman and CEO Jeffrey S. Lorberbaum said the costs for raw materials increased more than the company anticipated. With the closing of two staple yarn plants and several regional distribution centers, Lorberbaum said the company was seeking to “right-size the business.”

“We kinda figured it was coming,” said Wayne Puckett, 55, of Craigsville, who worked at the plant 31 years. “There’s nothing you can do.”

“What are you going to do?” Dofflemyer said. “The only thing we can do is look for a job.”

Mohawk said employees will be offered opportunities at other Virginia facilities and through the Virginia Department of Labor.

Harr said carpeting is still a viable flooring choice.

“We certainly think we’re at the bottom of this dip, but how quickly we’ll recover, we’re not sure,” he said.

Mohawk has an Oct. 30 conference call scheduled to announce third-quarter earnings.