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Foreign trade cited in local Climax layoffs

Company's petition similar to one filed by mill seeking benefits for laid-off workers


Foreign trade impacts may have led to the recent layoffs at Climax Portable Machining & Welding Systems and the U.S. Department of Labor is looking into the situation, a petition filed in mid-January indicates. If it determines trade did play a role in the workforce downsizing, the laid-off workers would be eligible for Trade Adjustment Assistance (TAA).

The Climax petition, filed by the Oregon Central Trade Act Unit (CTAU) in Salem, joins another recent Newberg TAA petition filed on behalf of the laid-off WestRock mill workers.GARY ALLEN - The Climax TAA petition joins the WestRock mill petition filed by the Association of Western Pulp and Paper Workers.

This newspaper previously reported between 20 and 36 workers were laid off in early January at Climax, a number that varied based on the source of the information. The TAA petition confirms 36 workers were let go on Jan. 8.

Those cuts came amidst a period of change for the company that began with a downturn in some of its prime markets, namely mining, oil and gas. Revenues fell in 2014, and late in the year parent company Industrial Growth Partners made a management change in the Newberg manufacturer, hiring Tom Cunningham to replace Geoff Gilmore as the new Climax CEO.

Incremental restructuring since then has led to reductions in the workforce, with some former workers estimating about 60 positions eliminated, including the major cut in early January.

The CTAU learned there were layoffs at Climax, so it looked into whether a petition should be filed on behalf of the affected workers. When a company does not have union representation, it’s common for the CTAU to file a petition, unit manager and TAA coordinator Ricque Smith said.

In the petition submitted Jan. 12, unit lead worker Shelly Forsberg noted Climax’s overseas activities as a possible trade impact.

“Climax operates globally and lists on their website connections with (the United Kingdom), Ireland, Scandinavia to list a few,” she wrote, adding that the company also has a long list of global businesses as customers.

“We here saw the potential connection for the trade impact,” Smith said.

Another petition was filed by Joni George, Climax vice president of human resources, a few weeks after the first, although it was voided when the TAA office noticed the duplicate. In describing the possible connection between the layoff and foreign trade, George wrote that “the declining markets for mining, oil and gas have had a negative impact on our sales which … reduced overall production requirements.”

The Climax TAA petition joins the WestRock mill petition filed by the Association of Western Pulp and Paper Workers. Both petitions have been forwarded to the federal Department of Labor, which will investigate the case by querying Climax on a long list of particulars.

A sample business data request used in a TAA petition case asks the subject company about organizational structure, products produced, importing activities, shifts of production to other countries, whether declining sales are due to customers purchasing products from other countries instead of the domestic company, and much more.

Investigators will then “analyze the facts to determine whether increased imports or shifts in production or services contributed importantly” to the layoffs, according to the labor department.

If approved, laid-off workers could receive help getting started in another job.

First and foremost, they would be eligible for re-employment services.

“That’s our goal, is to help these folks become re-employed in suitable work,” Smith said. But the average tenure of a laid-off worker in these cases is about 14 years, meaning they might not have an up-to-date skill level for other jobs, so the TAA benefits include a retraining process. That can take place either in a classroom setting or through on-the-job training.

If a laid-off worker receives a genuine offer of employment, but the new job would require a move, the TAA benefits can help offset moving costs by providing a relocation allowance.

Former workers enrolled in a retraining program and who have exhausted their unemployment compensation are eligible for Trade Readjustment Allowances, weekly payments of income support for the worker.

There are also other assorted benefits such as health credits and wage subsidies that apply in certain cases.

Both the Climax and WestRock petitions are still under review by the federal department. The program used to have a goal of making a determination within 40 days of the petition being filed, but when the trade act program was reauthorized for federal funding in 2015 a backlog of cases were reopened, and nowadays the waiting period is much longer.

The mill petition, for instance, was filed in late October and has not received a decision yet.

A third Newberg petition is also under review, filed on behalf of two Waste Management workers who lost their jobs when the mill closed. If foreign trade led to the mill closure, then it is also responsible for the lost waste collection positions, the petition contends.