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Frank Chervan, Inc. announced last week the closure of several operating units located at its Bedford plant.
The company notified about 90 affected workers Tuesday that operations will be closed in early February. The company will still operate a rough lumber mill in Bedford that will likely employ around 30 people.
“This was one of the toughest decisions we have had to make,” said company President Greg Terrill. “While we have grown rapidly over the past few years, rising costs of employment and particularly extreme health care costs have forced us to refocus and rescale the business. In order to preserve our core business and grow in the future we have to make the tough choices now.”
Chervan is now headquartered in Roanoke. The company is more than 80 years old and has focused on the business of contract manufacturing of wood and upholstered seating. As a supplier to the health care, office, hospitality and residential furniture industries, Chervan has grown in spite of industry challenges, a release from the company stated. The release stated that rapidly rising health care costs and turmoil in financial markets have made the recent operating environment particularly challenging.
“One of the largest markets we serve is for seating in major banks and financial institutions,” Terrill stated. “These end users of our products have been particularly hard hit by the financial crisis and we need to position ourselves to weather a projected significant downturn next year.”
The company has had long standing close ties with the community of Bedford. Chervan, which started in Ohio first located a plant in Bedford nearly 60 years ago.
“The Bedford plant is a close knit group of people that are hardworking, dedicated and committed to building high quality products,” stated Bedford Plant Manager Chad Eckart. “The industry will miss the craftsmanship that so many of these people have demonstrated over the years. Frank Chervan has succeeded over the years through their niche in the industry and their ability to compete on quality and fast service.
“The changes in business, economy, and the furniture industry will leave the company with many challenges,” Eckart said. “The only option is to reduce expenses, survive the near term and position ourselves to resume growth as the economy improves. All I can offer is a sad but special thanks to all the current and former employees that called the Bedford plant their work home.”
Chervan currently employs 210 people in total split between the Roanoke and Bedford plants. About 90 workers are affected by this shutdown in the Bedford operations. The company expects to offer many of the affected employees the chance to work in different positions in the Roanoke plant.
Eckart said the hope is that as many as half of the workers affected by the layoff will be able to join the plant in Roanoke, which has about 90 employees. “It’s a little early to say,” he said.
Eckart said the layoffs will occur in two phases over the next 60 to 90 days. The shipping, sanding and assembly departments will be affected first. The machine room will follow. “It’s a downsize,” Eckart said. “We’re in survival mode.”
He said while he expects the industry to recover, he doesn’t believe it will be a quick turnaround.
“It’s a lot of good people,” he said of those being laid off. He said those employees affected will be terminated and will have to reapply for positions at the Roanoke plant. No severance package has been offered, he said.
City officials learned Wednesday of the layoffs.
“Obviously we’re concerned about the scaling back of an industry in the city,” stated Bedford City Manager Charles Kolakowski. “We’re looking to help line up as much assistance for them as possible through the state and regional centers.”
Kolakowski said the city didn’t know specifically that the layoffs were going to occur. “Given the economic situation, you always have to be concerned that industries would be affected by it locally,” he said. “The furniture industry has been taking a hit for several years.”
Kolakowski said he met with officials from the company on Wednesday. He said assistance will focus on helping the employees affected find new employment and training. He said the city is trying to keep in touch with industries in the city on a number of issues. “All of them are tight and obviously concerned about the overall economic situation,” he said.
While the layoffs will affect the city’s utility sales, Kolakowski said the biggest hit will be in the loss of the work force. “Hopefully a number of those jobs will be locating to the other plant. Anybody losing a job is a difficult thing. That’s our biggest concern,” he said.
Kolakowski said the city is exploring the possibility of a program with the electricity costs where some industries might be able to save some money. “It’s something we’re trying to work with them on. We’re doing what we can with it.”
Even with the jobs lost at Frank Chervan, the city continues to have a significant manufacturing base, he said. “It’s a pretty significant number. It’s still an important segment.”