March 18, 2011 in City

Bouncing paychecks at Millwood plant leave workers in lurch

By The Spokesman-Review
 

When Rich Spencer received his paycheck Feb. 22, he didn’t waste any time. He went straight to the bank to cash it.

The checks from Millwood Manufacturing had been a little rubbery of late, and Spencer didn’t want to take any chances. A co-worker got there first, and his check was cashed.

“But I went to cash mine, and they said the account … had no funds available,” said Spencer, a 39-year-old wood craftsman. His co-worker “was about two minutes in front of me. I was really happy for him, because the last two checks for him had bounced.”

The bouncing paychecks at Millwood Manufacturing have ended, though most of the former employees of the custom-woodworking business haven’t been paid for a month of labor, according to several workers. The company, which produced beautiful custom woodwork for high-end homes and other projects, closed March 7, but the death was months in the making.

The company’s owner, George Schillinger, did not return calls seeking comment. But he made a statement to a TV news station last week, saying the bank had seized the company’s checking account without notice and sent demand letters to customers who owed balances to the company. “The construction industry has been hit extremely hard and Millwood is no different,” he said, according to Q6.

The former workers tend to blame Schillinger as much as the recession. They complain of months of unreliable paychecks, broken promises and what they call mismanagement by Schillinger, a former executive with the Black Rock projects who has served on many local boards and organizations. At each step along the way, Schillinger assured workers he was going to take care of things, workers said. That’s why most of them kept working.

“He’s telling everybody ‘don’t worry about it, I’m going to make it good,’ ” said Dave Halsen, the manager of the finish shop. “I feel a little foolish that I was strung out as long as I was.”

The company’s shop foreman, Don Kuntz, heard I was writing about this and called me to offer supportive statements for Schillinger. He said he felt he’d been dealt with honestly, and that others have misstated the impact – Halsen said 20-some workers were there at the end, but Kuntz said it was 12.

“George was very honest and up-front with all the employees,” he said.

When I asked him if he’d been told that Schillinger would cover the bounced paychecks, he hung up.

There’s no doubt that things in the construction business have been brutal, and the kind of high-dollar projects Millwood specialized in have been hit particularly hard. But workers say they still had a lot of work lately, and that they were even asked to work overtime on some recent projects.

Schillinger grew up in Spokane, graduating from University High in 1976, and went on to run several businesses before becoming a top executive in companies overseeing the Black Rock luxury golf course project in Coeur d’Alene, among other interests, according to his company biography.

Schillinger left Black Rock in 2007; late that year he bought Architectural Woodwork and Design and renamed it. The plant at 10019 E. Knox Ave. did genuinely amazing work, meant mostly for mansions, from elaborate doors to custom cabinets to wine cellars. Things began going south last fall, when Schillinger cut workers’ pay by 13.5 percent, Halsen said. In January, several paychecks bounced, workers said.

Josh Berg, a 26-year-old sprayer in the finishing shop, said the first of his three bounced paychecks came then – and it wasn’t made good for eight days.

“Basically, we all paid our bills and then find out the (paycheck) bounced,” he said. “You think you’ve got your money and you pay all your bills and then you realize you’re at negative 1,200 bucks.”

On Feb. 22, almost everyone’s check bounced, like Spencer’s. He was becoming more and more concerned about covering the mortgage and paying the bills. He knew that, based on the timing of the pay periods, by the time one check bounced, he was already owed for another 40 hours.

“I was pretty upset,” said Spencer. “It upset things right away because a lot of folks, including myself, live pay period to pay period.”

Halsen was part of the management team. He said in the last few weeks, the signs of collapse were everywhere, and Schillinger kept offering last-ditch promises. Workers hung around in the hopes of catching up, and out of a commitment to finishing ongoing projects, he said.

On March 7 – another payday, at least nominally – Schillinger told the workers he was broke, couldn’t pay them and the company was closing, workers said.

Several workers have filed or plan to file complaints with the state Department of Labor and Industries, seeking to get their unpaid wages. They have a lot of other beefs with Schillinger – the truth of which is hard to verify.

But listening to their stories brings home the messy, human truth that often is overlooked when we consider the latest layoffs, the newest unemployment statistic, the news item about a company closing. Whether it’s 12 or 24 people – such small numbers in the big picture, and such big ones if you’re one of them.

Spencer says he feels lucky, because he’s already found work. Berg’s drawing unemployment, looking for a job. Halsen said he’s not sure what his next step will be.

“It’s devastating,” he said. “I still haven’t made my mortgage payment this month, and I know it’s hitting these younger guys way harder than it’s hitting me.”

Shawn Vestal can be reached at (509) 459-5431 or shawnv@spokesman.com.


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