Moulding and millworkrecovery or mirage?

n sceNr HEADLINES FROM AcRoss l\the country have noted signs of life in the moulding and millwork industry. But is news of a turnaround premature?

"Hiring with Hope" ran a Chico, Ca.. newspaper headline announcing that Sunset Moulding was looking to add workers at its local plant. In actuality, Sunset needed to fill just three entry-level positions-and those were to replace one employee who retired and two others who resigned.

"It's not that business is getting better," said plant manager Tom Maclean. "I've got spots to fill. They're labor jobs."

He received about 25 applications in the first three days the hiring sign was up. even though the starting wage was low. But benefits are included and. he said. "those can be more valuable than the wage."

Maclean hopes for better days, but thinks they're not here yet. "I started in the lumber business out of college, and I've never seen it this bad," he said. When the housing market was booming, Sunset employed approximately 150 full-time. The plant currently has about 45 employees.

At the close of 2009, American Millwork, Elkhart,In., was able to put l8 employees back to work. Earlier in the year, however, American had laid off '72 workers when parent RAF Industries shifted production to sister company Ferche Millwork, Rice, Mn.

"I'm so excited about hiring people back," said Tom Harper, who has served as president of American Millwork for the past year. "It's a good feeling because it was awful when we had to let those people go."

Harper hopes to be able to rehire more workers before the end of 2010. "I'm pretty optimistic we're going to see good sales growth this year," he said. "As we grow, we've got plenty of space here."

According to RAF Industries, "options and incentives not available to us previously" prompted the company to reconsider its plans to close the Elkhart facility. Other factors were a slight upswing in the housing market and employee wage concessions. The equity firm also said that ramping up production in Elkhart "represents the best long-term positioning of the combined businesses when our industry recovers from the current economic conditions."

Unfortunately, just after American took a step forward, Ferche took two back. In early January, Ferche laid off 22 employees on the night shift, representing less than 10Vo of the company's work force. "lt's economic in nature. Under current conditions, you don't need that capacity," said Gerald Grider, president of Ferche. "We'll certainly take that capacity back when conditions change."

There was no way to spin the news as good at Union Planing Mill, which was forced to close at the end of 2009 after 118 years in Stockton, Ca. "The state of the construction industry right now is terrible," said president Matt Brodie. "You bid and you bid and you bid, with very little to show for it."

One of the problems, Brodie said, was that the company lacked the deep pockets needed to continue operating in an uncertain economy. "It comes down to capital," he said. "The bigger, better capitalized companies will be the survivors."