Andersen cuts 50 jobs, lays off 400

The gloomy housing market struck again Thursday as Andersen Corp. announced that it is permanently reducing its Bayport workforce by 50 people and temporarily laying off 400 others at the plant during the first quarter.

Employees were told Thursday afternoon that they could depart immediately and get paid for two weeks of service before their severance kicks in, spokeswoman Maureen McDonough said.

The layoffs, the fifth set of staff reductions for the giant windows and door maker since January 2007, are signposts of the cratering housing market.

Another sign of weakness came this week when residential union carpenters in the Twin Cities -- those lucky enough to still be working -- began finding less money in their paychecks.

A 10 percent cut in carpenters' pay -- made up of a $3.23-an-hour cut in benefits and an 80 cents- an-hour cut in wages -- took effect in December and is now showing up in their paychecks. The cuts affect only residential carpenters, defined generally as those working on buildings that are four stories or less in height.

McDonough said Andersen's layoffs were prompted by slow housing sales and the continuing credit crunch. She said Andersen has tried other ways to cut labor costs in the past few years, including offering early retirements, shorter workweeks, and voluntary, temporary layoffs.

The cuts "have produced substantial cost savings that have helped us minimize the need for permanent reductions," McDonough said. Despite those efforts, she said, "we are announcing that Andersen is permanently reducing its workforce by 50 employees in the office and management, and then we are planning a temporary layoff of about 400 employees over the next few weeks."

It's uncertain when those workers would be called back, but company officials don't expect that to occur before April.

Current and former workers said privately that Andersen has furloughed Bayport workers before but never this many or for such a long time.

In January 2007, Andersen, which had 22 factories around the country, cut 400 workers from its Bayport plant and 40 from its plant in Menomonie, Wis. Two months ago, the company cut 52 more workers from Menomonie and said it would shut its plant in Durham, N.C., in December, displacing 450 others.

Company officials said at the time that they did not expect more job cuts in Bayport because the plant produces higher-priced housing materials thought to be less affected by the recession.

By contrast, the Menomonie plant makes modestly priced windows and doors that were popular with high-volume builders, making workers at that plant "particularly vulnerable" to the decline in housing starts.

Andersen employs 11,000 workers, down from about 15,000 in 2006. The company, which has 5,000 workers in Minnesota, sells its products across the world.

Despite the tough times, McDonough said the company made money last year and plans to distribute profit-sharing checks in February. She said the amounts aren't known yet because the company is still closing its books.

Breakdown of cuts

As for the unionized residential carpenters, their total wage package dropped to $37.53 an hour from $41.56. Wages make up $28.83 per hour of the package, down from $29.63. The rest of the hourly pay goes to health care, pension and an apprentice training fund, according to the United Brotherhood of Carpenters Local 87 in St. Paul.

The reduced wages and benefits are those received by a "journeyman carpenter," meaning one with at least 7,000 hours of work experience. While there are several thousand such workers in the Twin Cities, an exact number was unavailable.

Some builders said the union was concerned about the loss of work to nonunion carpenters. However, a pay cut of $4 an hour still would not make union carpenters cost-competitive with nonunion carpenters, they said.

But the pay cut comes at a time when housing-related jobs are increasingly scarce. In the past year, Minnesota companies primarily engaged in residential building have cut 1,790 jobs, or 13 percent of the workforce, said Steve Hine, labor market research director for the state's Department of Employment and Economic Development.