The economic impact of the COVID-19 pandemic came abruptly and painfully in mid-March for about 500 of the 800 production employees at Lydall Inc.’s manufacturing facilities in Yadkin County.
The plants in Hamptonville and Yadkinville were among the first to be closed temporarily (on March 23) in the Triad, a ripple effect of the pandemic on the U.S. automotive industry.
Lydall makes specialty thermal, acoustic and filtration products.
The Yadkin plants serve all of the company’s domestic automobile customers. The plants have combined about 1,000 employees at full production, making Lydall one of Yadkin’s three largest private employers.
Lydall wasn’t alone in the Triad in making a mass furlough decision by early April. Other manufacturers, hospitality and hotel venues, movie theaters, healthcare facilities, trucking companies, and retailers took the step as well.
Perhaps foremost on the list is Forsyth County’s largest employer, Wake Forest Baptist Medical Center, with more than 14,200 workers.
Although some Triad businesses did not provide a furlough breakdown, the total count likely exceeded 2,500 people.
After about seven furlough weeks, enough customer orders resumed by late May for the Lydall plants to slowly bring back workers, said Joseph Abbruzzi, president of Lydall Thermal Acoustical Solutions.
The increase picked up steam in June, with most furloughed employees “that we could get back” returning by late July, Abbruzzi said.
“Our automotive customers have been ramping up quickly in July, particularly truck production, and we expect to see orders at the pre-COVID levels into August and beyond,” Abbruzzi said.
With the return of existing business and new orders for two stamping presses, Abbruzzi said Lydall is trying to hire up to 110 employees as quickly as it can.
Between 60 and 70 of the new hires would replace workers who chose not to return either because of COVID-19 health concerns, because they found another job in a neighboring county while furloughed, or because they were waiting for the $600 federal unemployment insurance benefit to expire July 25, Abbruzzi said. About 40 employees would be dedicated to the new presses.
Some furloughed employees “were making more with the stimulus payments ... a fair amount above that,” Abbruzzi said.
Furloughs end early at Baptist
Wake Forest Baptist had perhaps the most jarring local furlough disclosure when it confirmed April 23 that “most employees in our health system will be participating in (changing) time or pay in some fashion.”
“We have carefully designed this plan to provide some continuous income and benefits (even if hours drop below what typically qualifies) for our employees,” said Dr. Julie Ann Freischlag, chief executive of Wake Forest Baptist and dean of Wake Forest School of Medicine.
The system did not disclose how many furlough days or weeks employees were required to take.
Because of the return in May of non-essential elective surgeries, along with reduced personnel expenses, Wake Forest Baptist was able to shorten the furlough period for most affected employees from 16 weeks to 12 weeks, and ending Friday instead of Aug. 31.
“Despite all of the challenges that we have faced, the personal and professional sacrifices and changes that each and every one of our team members made have helped us recover more quickly than anticipated,” Freischlag said.
PPE sales aids Hanesbrands
Hanesbrands Inc., the only Fortune 500 company in Forsyth, said April 8 it was placing an additional 575 U.S. headquarters or office-based employees on furlough, including 180 locally, through at least late May.
Hanesbrands has about 2,500 employees in Forsyth County, along with a distribution center in High Point.
The company in March placed about 1,800 U.S. retail store employees on furlough, 70% of whom are part-time employees. It began reopening retail stores in late May.
Spokesman Matt Hall said Thursday the number of employees still on furlough is 41 locally and 660 in the U.S.
“Workers have been called back continuously as business needs and their work responsibilities returned,” Hall said.
“The callback timing has been unrelated to” the expiration of the $600 federal weekly UI benefits.
Surviving job cuts
Another major manufacturing employer in a suburban Triad county is Gildan Activewear Inc., which has more than 200 employees at its yarn-production plant in Mocksville and more than 500 full-time and 100 contract workers in Eden.
Gildan announced March 23 it was temporarily halting production at all U.S. manufacturing plants until at least mid-April in response to state-mandated shutdowns of non-essential businesses.
After being idle for about three months, production and distribution facilities began ramping up operations in June, “initially at reduced capacity levels and adjusted in line with demand through the quarter.”
By June 30, Gildan had ended the employee furloughs, and salaried employees went from working four days back to five.
On Thursday, Gildan said it had reduced its global workforce by 12.3%, or by 6,000 manufacturing and 380 administrative jobs, during the quarter. That left Gildan with 46,000 jobs globally.
In announcing the job reductions, Gildan said “we continued to manage and align our operations with the current demand environment, and taking into consideration the uncertainty that remains with respect to the ultimate impact of the virus and the pace at which global economies will recover.”
The Triad was spared a material job hit, said Geneviève Gosselin, Gildan’s corporate communications and marketing director.
“All of our N.C. distribution centers and yarn spinning facilities have now reopened at different levels of production<” Gosselin said. “We are also in the process of recruiting employees to fill open positions within our yarn-spinning division.
“The temporary shutdown of our facilities and potentially personal work/life factors in the current environment are elements that may be contributing to some of the labor shortages.”
Other corporations with major Triad work forces have not updated their employee furlough status.
For example, the 1,500 employees of Collins Aerospace are experiencing an extended furlough period in response to the pandemic.
Parent company Raytheon Technologies Corp. has said its overall cost-reduction initiative would be worth at least $2 billion, of which $600 million was accomplished in the second quarter.
Steve Timm, Collins’ president, said in a memo to employees that the furlough schedule for hourly employees will be site-specific, “as this activity is directly tied to customer demand.”
Gregory Hayes, Raytheon’s chairman, chief executive and president, said in a memo to employees that furloughs for salaried employees would begin June 1 and potentially last through at least the end of the calendar year.
On Tuesday, Hayes told analysts that “we’re also taking a hard look at the businesses given the environment and the prolonged recovery, and we’re going to take additional actions as we think are appropriate.”
“I think it’s important to note, the commercial aerospace reduced to about 8,000 positions. Some of those will come back with volume. Some of them will be permanently reduced.”
On Thursday, Raytheon confirmed it had eliminated an undisclosed number of Collins Aerospace employees on a companywide basis with media reports indicating a sizable number occurred at its Cedar Rapids, Iowa, operations that once served as the headquarters for Rockwell Collins Inc.
“Collins Aerospace continues to experience and forecast reduced business due to COVID-19,” according to a statement. “While we were hopeful the previous cost-cutting steps to align our business with lower levels of commercial demand would be enough — they simply were not.
“This week, we have made the extremely difficult but necessary decision to implement an involuntary separation program across our U.S. operations. Impacted employees will receive a separation payment, transition payment, and continuation of benefits, in addition to outplacement services to support impacted employees through the transition.”
Matching demand, jobs
Old Dominion Freight Line Inc., based in Thomasville, confirmed April 23 that a pandemic-related decline in business led “to a necessary adjustment to our workforce.”
The company declined to say at that time how many employees were affected by furloughs, the length of the furloughs or how long the cutbacks were projected to last.
Adam Satterfield, Old Dominion’s chief financial officer, told analysts in April that “due to the unprecedented decrease in revenue we experienced in April, we implemented the furlough program in attempt to balance the number of employees actively working with current freight trends.”
On Thursday, the company listed having, on average, 17,911 employees during the second quarter, down 10% from 19,948 in the first quarter and down 13.6% from 20,735 in the year-ago period.
As of Dec. 31, 2019, Old Dominion had 910 employees at its headquarters and 720 workers at a service center in southwest Greensboro.
Satterfield told analysts Thursday that “we brought many people back from the furlough program.”
But he acknowledged “we’re down about 1,400 positions overall” now compared with March.
Satterfield said the company’s department heads are “going through evaluating their costs, and costs don’t save themselves. It takes action and a plan, and we’ve figured out ways to be able to do more with less.”
“If our accelerating trends continue, we certainly will have to continue to bring back some more employees with increased volumes.”
The rounds of furloughs may ramp up again as some corporations’ employment commitments expire as tied to the federal Paycheck Protection Program initiative.
The American Airlines reservations center in Winston-Salem will begin furloughing employees as early as Oct. 1, while also offering voluntary separation packages.
The airline filed seven WARN notices with N.C. Commerce on July 16, including one for the center at 799 Hanes Mall Blvd. in Winston-Salem.
American received $5.8 billion in cash and loans from the PPP. In exchange, American committed to not conduct major job cuts or layoffs before Oct. 1.
A memo sent to employees said 1,000 reservations employees companywide would be affected by the workforce reduction initiative, or 23% of about 4,300 in that workgroup.
The WARN notice said 369 or 370 employees would potentially be affected at each facility.
The Winston-Salem center currently has between 600 and 650 employees, of which about 400 have been working from home due to the pandemic, according to CWA Union 3640.
The WARN notice for the N.C. facilities said 74 employees across the facilities would have their jobs eliminated between Oct. 1 and Oct. 15.
A combined 2,474 could be furloughed between Oct. 1 and Oct. 15, while another 40 employees could be furloughed between Nov. 1 and Nov. 15.
“The furloughs are expected to be temporary,” the company said in the N.C. WARN notice.
The company said the number of furloughs could be reduced based on how many employees take voluntary buyouts.
Hospitality still hurting
While manufacturers have been able to bring back furloughed employees, the local hospitality industry has not been so fortunate.
The Twin City Quarter complex in downtown Winston-Salem, comprised of Marriott, Embassy Suites and Benton Convention Center entities, filed WARN Act notices in late March that they have temporarily laid off a combined 169 employees.
The notices are 92 employees for the Marriott property and 77 for Embassy Suites and Benton.
Ronald Mader, regional vice president of operations and transitions for Twin City Quarter operator Hospitality Ventures Management Group, said last week the Marriott and Embassy Suites have limited services available.
Mader said “the mayor (Allen Joines) has not changed the restrictions for the Benton, and it remains closed so no update at this point.”
On June 26, the Kimpton Cardinal Hotel in downtown Winston-Salem said in a WARN notice it had laid off at least 77 employees indefinitely.
The hotel at 401 N. Main St. debuted in April 2016 in the historic former R.J. Reynolds Tobacco Co. headquarters with 80 restaurant and 50 hotel employees. It is not known what the workforce totals were before the layoffs.
The operators said temporary layoffs began in early March when the brunt of the pandemic began to be felt in the local hospitality sector. The layoffs “were expected to last a short time,” the operator said.
Instead, the pandemic’s effects on business “are greater than previously were foreseeable. As a result, we had to reassess our understanding of the circumstances facing the hotel.”
The operators said “it is now reasonably foreseeable that the layoffs will last at least six months. If conditions do not improve thereafter, (the layoffs) will continue indefinitely.”