NORWALK, Ohio - Norwalk Furniture Corp., the city's largest manufacturer and its second-biggest employer, suspended operations at its local facility yesterday, idling more than 500 workers.
In a weekend statement, the privately held company blamed the suspension of operations at its plant in Norwalk and another in Cookeville, Tenn., on a slowing economy and changes in the furniture industry. Norwalk Furniture's sales dropped $8 million from 2006 to 2007.
The company told its local employees that they were not to report to work yesterday, and referred any questions to its human resources department. It gave no indication whether the shutdown would be reversed.
Company officials could not be reached for comment.
Norwalk Mayor Sue Lesch said the northwest Ohio city is working with the furniture company in hopes of getting its facility operating again.
"I hope this is temporary," Mayor Lesch said. "They've faced a lot of challenging economic times over the years and they're trying to get things back together and get people back to work."
The furniture industry nationally has suffered from the weakened economy and the housing slump. Even giant La-Z-Boy Inc. in Monroe, reported last month a $13.5 million financial loss on sales of $1.45 billion for its latest fiscal year. Its sales plunged 10 percent.
Founded in 1902 by German-born Edward Gerken, the firm moved to Norwalk in 1919. Its products are sold both through a chain of franchise stores under the name "Norwalk - The Furniture Idea" and by hundreds of independent retailers, such as Veh & Sons Furniture in Gibsonburg.
Matt Kohler, co-owner of Veh & Sons, said he returned from vacation yesterday to an e-mail that one of his main furniture suppliers was suspending operations.
"It doesn't bode well for the furniture industry when this happens to a big player like Norwalk," Mr. Kohler said.
"It's not going to hit us as hard as some retailers, because we're a multivendor store. But it's going to create a certain amount of void on the floor space. The big question is how do we service customers who bought Norwalk Furniture and have an expectation that their issues will be addressed?"
The company's announcement surprised Gary Steinbeck, the subregional director for the United Steel Workers, which represents about half of the workers at Norwalk Furniture's facility. Mr. Steinbeck said he wanted to talk to local leadership before commenting.
The closing is a big blow to the community. Unemployment in Huron County was the highest in northwest Ohio in May, at 7.3 percent. June figures will be released today. According to the Ohio Department of Job and Family Services, which tracks unemployment in the state, more than 2,100 workers in the county actively were seeking jobs in May.
"It's tough times in Ohio," Mayor Lesch said. "These are good jobs. The kind that are hard to replace. They're a good company and a good family. I'm hopeful that they're able to pull this out, but I'm an optimistic person."
Bethany Dentler, economic development director for the Norwalk Economic Development Corp., said the suspension would have "a very significant impact on our local economy" in the county. "We're working very hard to see what we can put together to see what we can do to keep Norwalk Furniture in business."
Employees told Ms. Dentler yesterday that the economic troubles weren't entirely unexpected.
"Because of the nature of their particular industry, whenever the housing market and the general economy goes through whatever it is that we're going through, it's going to have an impact on high-end furniture makers," she said.
The company said last year it had 50 employees at its Cookeville manufacturing and sawmill operations.
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Norwalk Furniture Corp., the city's largest manufacturer and its second-biggest employer, suspended operations at its local facility yesterday, idling more than 500 workers. In a weekend statement, the privately held company blamed the suspension of operations at its plant in Norwalk and another in Cookeville, Tenn., on a slowing economy and changes in the furniture industry.