January 4, 2007 in Business

Housing slump hits home in Colville

By The Spokesman-Review
 

A nationwide home-building slowdown has led to temporary layoffs and manufacturing cutbacks at a Hearth & Home Technologies factory in Colville.

The slump forced the large employer to halt production for about a month beginning in mid-December and furlough its 380 employees, according to company vice president and general manager Jason Olmstead.

When production of fireplace and stove inserts resumes within a couple weeks, the company intends to have about 275 employees back at work. By the end of March the company anticipates the return of other employees, a relief in Colville, a town of 5,000 people.

“It’s been real difficult,” Olmstead said of the temporary layoffs over the Christmas holiday.

The problems came as a surprise for the company, which is a subsidiary HNI Corp., a leading office furniture-maker traded on the New York Stock Exchange.

During the past couple of years, the company struggled to keep pace with demand even as it added about 140 more jobs and doubled production. Olmstead said the Colville factory – one of three owned by Hearth & Home – had a $20 million order backlog at the beginning of the year, for example.

But the housing slowdown and retreating natural gas prices hit fast, leaving the plant with too much inventory.

Many inserts sold now burn pellets made of wood and corn in response to customers looking for cheaper heating fuel than natural gas and heating oil.

With the prices falling, however, and warmer winter weather across the northern United States, sales are off.

Hearth & Home is among the top 10 property taxpayers in Stevens County.

“We sure hope everything works out for them,” said county Treasurer Sue Harnasch.

The Colville plant – bought by HNI in 1998 — is now a $100 million a year operation.

The effects of the housing slowdown also hit cabinetmaker Huntwood Industries this fall. The company laid off employees shortly after opening a massive new Liberty Lake manufacturing plant and showroom visible from Interstate 90.

To underscore Hearth & Home’s business confidence, Olmstead said the company recently signed a two-year lease for more manufacturing space.

“We absolutely anticipate full production by the end of the first quarter,” he said. The Colville factory is the exclusive maker of Quadra-Fire brand inserts.

The company works with smaller, independently owned retailers rather than the larger box stores.


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