By Reggie Ellis
Waterman Industries laid off about 180 employees until further notice on Friday, Feb. 6 after announcing it was suspending operations indefinitely due to "unforeseen business circumstances, that include unexpected actions taken by our bank."
Waterman's President and CEO David Appling told the Visalia Times-Delta that the "unforseen circumstances" was a cash crunch created by the closure of the company's foundry and pattern operations plant in 2002.
At that time, Appling said the plant had consistently lost money due to increasingly strict environmental standards, which doubled the cost of making castings that were less expensive to purchase from out of state. Manufacturing of the company's castings for irrigation and water control systems were transferred to out-of-state suppliers. When the doors of the plant on the corner of G Street and Firebaugh Avenue in Exeter closed, more than 50 employees lost their jobs. The cost-saving decision ended up costing the company more money in delays and decreased production.
"We had 160 truckloads of patterns that had to be disassembled, and they had to learn to make the castings," Appling said about outside suppliers hired to manufacture castings for Waterman's.
Human Resource Manager Daymon Qualls said the company is still filling orders, receiving materials and servicing existing clients despite some reports that they are defunct.
"We are not closing our doors, we are suspending operations," Qualls said. "We are still open for business. This will give us time to regroup and come back with a new plan.
"We are not going away and are dedicated to making every attempt to rapidly restore this company."
Appling said a small crew of administration and sales staff, 22 people, will continue to work while the company attempts to formulate a plan to right the financial ship.
Located on Spruce Road south of Exeter, the irrigation valve manufacturer has been family owned since 1912 and has historically employed a significant number of local residents. The company has been an industry leader worldwide in irrigation components throughout its history.
"Our goal is to quickly emerge from this restructuring effort with an innovative plan that will provide Waterman Industries Inc. a new healthy financial foundation and will enable it to continue to be a leader in the industry," a Thursday announcement to employees read. "We sincerely regret the effects this necessary business decision will have on our employees and other stakeholders and wish to thank all of you for your understanding and cooperation."
Appling told the Times-Delta that the company is negotiating with its bankers over a business plan. If the company's proposal is accepted Waterman's will resume manufacturing. Appling said hiring employees back would be gradual and he isn't sure how many positions will be retained. During an announcement last Thursday, Appling told employees that the some positions may be eliminated permanently.
Exeter Chamber of Commerce President Art Zschau said the impacts of the lay off will be felt negatively throughout the community.
"It is not devastating because the ag economy seems to be a little better than it has been in years past," Zschau said. "However it will affect us all."
Zschau, manager of Bank of the Sierra's Exeter branch, said families may have to consider moving out of the area and/or may have to restructure personal finances and cut costs, such as shopping, eating and entertainment within the city of Exeter.
"I don't know what their financial situation is but it will hurt this area through higher unemployment," Zschau said.
Waterman still operates plants in Cairo, Egypt; Lubbock, Texas; Memphis, Tenn; Boise, Idaho; Garden City, Kan.; and Grand Island, Neb. Qualls said those plants operate autonomously from the Exeter headquarters and will be unaffected by the financial problem in Exeter.
"During this period the company will continue to explore options for a new operating structure and financial plan," the announcement read. "As we enter this process we are optimistic that a new operational plan can be put into place in the near future."