News

Posted in: News
Life and Hope at Victor Plastics
By Mitch Traphagen mitch@eiherald.com
Feb 7, 2008 - 11:40:41 PM

Trial subscriptions will end soon!  Don't miss a minute of the best in East Iowa news and features - subscribe to The Herald today!

Falling snow and fog enshroud Victor Plastics but inside there are rays of hope that a buyer will soon be found. Mitch Traphagen Photo

VICTOR – Layoffs have become ubiquitous.  It seems that these days, nearly every company has announced them at one time or another.  Recently, an independent outplacement firm reported that planned layoffs rose significantly in January over the previous month.

Another day, another headline.  Turn the page.

But there is nothing casual or commonplace about it if it is your job that is threatened.  There is nothing casual about it if it is your mortgage payment on the line – or if your kids’ future and well being is suddenly vulnerable from acts and forces beyond your control.  Or if it is your ability to buy groceries to simply feed your family that is thrown into question.  While the rest of the world turns the page to see the ‘Next Big Headline,’ it is as if you are stuck in the story from the day the layoffs were announced – mired in the anxiety of wondering what will happen next.  From that day, the paycheck you counted on to shelter your family, your dreams of better things and happy times, your very existence, is abruptly tossed into the wind.

Once announced, layoffs are generally considered a foregone conclusion.  The January press release announcing the bankruptcy of Victor Plastics left little doubt in that regard.  The company had planned “an orderly wind down” of operations.  The press release said, in so many words, the company was going to go away and jobs would be lost.

But that may not be how the story ends.  Seemingly against all odds, the employees of the company, along with a community group, the Victor Community Development Association, may well be turning a tide.  

In relatively small numbers, the layoffs have already begun.  But then in the confusing, sometimes anger-filled days following the bankruptcy announcement, something unusual happened.  The community stood up and the remaining employees put their heads down and went back to work.  The employees showed a commitment to both company and customers that the ownership apparently failed to show them.  But if the ownership couldn’t or wouldn’t see what they had, other companies did.  Suddenly, the foregone conclusion of more layoffs was also tossed into the wind.

Mark (not his real name) has worked for Victor Plastics for well over a decade.  He’s not alone – many of the employees have been there that long.  Long before the company was taken over by an investment corporation in Minneapolis.  

On January 15, with a simple press release issued by a public relations person who, in all probability, has never set foot in Victor, Iowa, the only life Mark has known for most of his adulthood was thrown into question.  The press release didn’t mention Mark; the public relations representative probably doesn’t even know he exists.  But with her words, his life was changed.

“I have to tell you, the first week and a half were brutal,” he said, referring to the day the bankruptcy was announced.  “I think everybody has sort of settled back into doing their job.  We're down some manpower - maybe not people on the floor but key people who made things happen.  I hope something happens as quickly as possible because there were 30 to 40 people who were let go and I don't know what they are doing.  I'm at least still getting a paycheck but there are a lot of very talented people who were let go who would love to see a buyer come in.  I try not to forget that as much as it is a downer for us, at least we still get to show up everyday.”

Dr. Leonard Seda, president of the Victor Community Development Association, is holding out high hopes for a happy ending to the story.  He has been involved – sometimes behind the scenes – since the bankruptcy was announced.

We’ve (the VCDA) met once a week and I’ve been communicating with consultants every day to talk about prospective buyers,” Seda said.  “We are doing whatever we can.”

Seda is seeing the tide turn in the bankruptcy saga – from a foregone conclusion of the liquidation of the company and the loss of jobs to seeing a marked increase in interest in the plant.

“What we’re encouraged by and what we are hearing is that the workers that have not been laid off continue to do a good job – they continue to work hard,” he said.  “With that, a potential buyer could have their investment in the plant begin to pay off immediately.  That is a very important thing because if that didn’t exist, the value for a buyer would be much less.”

And to potential buyers, there apparently is a great deal of value.  Mark has seen them tour the plant.

“It feels good to all of us when we see people coming through - they seem pleased with what they are seeing,” Mark said.  “It feels good to know that we are wanted by somebody.  I hope it happens quickly enough that we don't lose too many good people.  There are some couples where both the husband and wife work there - it has to be a double panic for them.”

And for many employees, panic could have been an apt description.  Most of them learned of the bankruptcy by seeing it reported on the news.  But now, after nearly a month, a resolve is setting in.

They have lost their vacation time.  They have lost their benefits – including health insurance.  But today, the remaining employees are working harder than ever – seemingly to prove the bankruptcy of the company founded by Jim Kubu does not mean the employees failed – or even the company failed.  Perhaps that the failure lies elsewhere in acts and forces beyond their control.

“At this point I feel confident that something is going to happen but... I have a family.  I need to talk to my wife about what we might do,” Mark said.  “I have lots of skills but I've lived here my entire life.  I was born and raised here and I don't care to move from here.”

For some employees, they are not willing or able to take a chance.  There is simply too much at stake.

“Our insurance ended on Feb. 1,” Mark said.  “I think most people have made other arrangements and they are telling us they plan to give each employee $350 to help buy insurance but I'm certain that a lot of people are going without insurance.  Buying it alone is more expensive and I'm sure I'm working with people right now who don't have insurance - they just can't swing it. For people that are thinking about leaving, insurance is probably one of the big reasons.”

The clock is ticking not only for the employees but also for the customers.

“Kawasaki, for instance, is a big customer - they aren't looking to pull their stuff out,” Mark said.  “They have huge molds and they can't just take them anywhere.  The customers are just as much over the barrel as the employees. Some of the stuff here we've been making for almost 20 years now.  For the customer to have to pull out in three months - it can take six to nine months just to begin production.”

Dr. Leonard Seda, president of the Victor Community Development Association has been involved in helping to find a buyer since the bankrupty announcement. Along with the employees, the VCDA can be credited with helping to turn the tide.

For the moment, the employees are left to wonder – but they do have hope.  Yet when the day ends, thoughts of “what will happen, what will I do” surely creep in.  Health insurance and groceries and educating their kids quickly rise to the top of things to worry about.  And still many in the plant feel that it should never have come to this in the first place.

“At first it was nice having a corporation that had the money backing them,” Mark said.  “At first there was a big influx of equipment - whatever we needed, they could get us.  But as the years went on, it felt less and less like anyone even cared about the plant or the employees.”

But the workers in the plant do care – and they know how things could have been.

“We have good people and we know what we're doing,” Mark continued.  “We've felt like that - we know what we are doing, just get out of our way and let us do it.  It almost felt as though we were being sabotaged sometimes.”

The customers apparently recognize the workers talents – the orders are still coming in.
“We are working as hard as we can with what we are given,” Mark said.  “As orders come in, we are allowed to buy supplies.  My understanding is that we have enough orders right now to run clear through the summer.  I've even heard people talking about wishing they could add a few people but I can't see how they could do that.”

Nearly a month into the bankruptcy and the rumors are still flying – firm answers are few.  It is something that every employee has to deal with.

“Sadly for us, every week seems to be like a month.  Everybody wants to hear every rumor you've heard.  Right now we'll even take disinformation, “ Mark said with a laugh.

It is still early in the process but the picture is beginning to clear – and more and more, answers seem to be just around the corner.  In a press release that acknowledged a limited ability to discuss potential buyers, Seda, through the VCDA said this:  “I am very encouraged that we’ll be able to announce good news in a couple of weeks.”

For the employees – and for the community at large – those weeks may well seem like a couple of months.  But reality also must play a role.

“Bottom line is, until there is an announcement that somebody bought us, everybody still has to hedge their bets,” Mark said.  “I have to look at it that as of May 1, I'm going to be out of a job.  But I've been around the industry for a long time, I know there is no reason we shouldn't be profitable.”

The company was profitable – and those who work there know that it could be - it should be - again.

“We just want to know,” Mark said.  “But you have to be realistic - it takes time and this isn't a small sum of money. Everybody should know the employees are doing everything we can to make ourselves marketable.  We know the effect of this is far-reaching in the area.”

A community rose up and the employees went back to work - the tide is beginning to turn. 

There is life and hope at Victor Plastics.



© Copyright 2008 by The East Iowa Herald