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Contact Industries 'reduces' 47 more jobs

Housing market woes lead to second round of layoffs since January

by: KEVIN GABOURY/CENTRAL OREGONIAN - Contact Industries

Citing the downturn in the housing market, Contact Industries laid off 47 employees last week. This move comes only two months after their "reduction in force" in January when the workforce was reduced by 55 employees.
   "The housing has just continued to go south, so our customers are still ordering less material," Contact Industries Vice President of Manufacturing Bob Horton said. "We're certainly directly impacted by the homebuilding market in the U.S."
   With an educated guess to guide them, Contact officials are worried about this year's housing market and the slide they have watched over the past few years.
   "There's a group called the NAHB, the National Association of Home Builders. They're really the guys that keep statistics on housing in this country," Horton continued. "In 2005, for single family homes, they had a measurement of 1,719,000 homes that were built. Then in 2006, it was 1,474,000. In 2007, it was 1,039,000. The scary one is the projection for 2008, only 769,000."
   Contact manufactures products that are used in most types of buildings, which, without so many being built, has lead to the company's layoffs.
   "We do some architectural work in commercial construction, but we're also very tied to the single family housing," Horton said. "When that took the sort of dive that it has, it's certainly had an impact on us. We're not alone though. We're in good company."
   Horton referenced realtors, mortgage brokers and contractors as having also felt the pangs of the sliding housing market.
   "Whether you've got an electrical shop or a plumbing shop, everybody is feeling a slow down in housing, especially one that is this large," he said. "I think we were kind of coached that if you weren't engaged in the real estate market, then you were missing out on the best deal of the decade. Of course that bubble popped."
   Hoping warm spring weather will encourage home building, Horton explained the terms the company has used for the layoffs.
   "We called the first one a reduction in force. We did that because we didn't want to have people think that they were going to be recalled to work anytime soon. The housing thing was just dropping off the cliff," he added. "On this one, we think we're at or near the bottom and as weather gets better across the country, we'll see some pick-up. Although we don't expect to see anywhere near a return to 2007, 2006 or 2005 housing, we certainly will see things get a little better."
   For the immediate future, Contact officials are hoping to offer stability to the remaining 375 employees.
   "The first goal is to get the people that we have here back to full paychecks," Horton said. "They're not on part time, but there are some weeks where we're not working full weeks. We'll have this week and next week. Beyond that I can't see it."
   As the weather warms across the country, Horton feels that the market will come around again soon.
   "Our crystal ball is no better than anyone else's, but we feel we're at the bottom of the market," he said. "There'll be resurgence in building. This hurts - having to lay people off is a painful thing, but the sky isn't falling."