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Follow us on TwitterClosures at Bedford furniture plant will affect 90 workers
Jill Nance
The Frank Chervan Inc. furniture plant is one of Bedford’s largest employers. It will be shuttering many of its operations at the site, a move which will affect about 90 workers. Some of those could be offered jobs at the Roanoke site, said Greg Terrill, president.
One of the city of Bedford’s largest employers plans to shutter most of its operations early next year, a move that will affect about 90 workers.
Frank Chervan Inc. announced the move on Wednesday, citing rising healthcare and electricity costs and an expected decline in demand for furniture. Its plant on Dawn Drive currently employs about 120 people, said Greg Terrill, president.
The company will continue to operate a lumber mill with 30 employees in Bedford and a factory in Roanoke.
Some of the affected workers could be offered jobs at the Roanoke site, but Terrill said he wasn’t sure how many. The company expects to close the operating units in Bedford by February.
A layoff of 90 workers could double the city’s unemployment rate to about 8 percent, depending on how many of the workers live in the city.
“This was one of the toughest decisions we have had to make,” Terrill said in a written statement.
Elizabeth Berry-Mosley, the city’s economic development director, said she looks at the announcement in a broad context.
“The economy is doing a bad turn that’s probably going to make everybody suffer,” she said. “We need to work with our existing industries to help them out as much as we can.”
City Manager Charles Kola-kowski said the city would work with several agencies to help displaced workers, and to help Frank Chervan sell its buildings in the city.
The 80-year-old furniture company has had the Bedford plant for about 60 years. It specialized in making unfinished wooden frames for furniture.
Two years ago Frank Chervan Inc. bought a plant in Roanoke from Hooker Furniture Company, which was closing. The new plant allowed the company to expand and create finished furni-ture. Those products have done well, Terrill said.
Business has been great for Frank Chervan this year. Its sales increased 30 percent above 2007. But the sales failed to keep pace with employee healthcare ex-penses, which jumped at least 40 percent this year, Terrill said.
Also, the company expects to get fewer orders in 2009. Some of its major customers were banks and financial institutions hit heavily by Wall Street’s financial crisis this fall. As those customers finish furnishing the buildings they had already started building or renovating, business for Frank Chervan could drop off, Terrill said.
The choice to move the Bedford facility’s operations and much of its machinery to Roanoke came for several reasons.
At 250,000 square feet, the Roanoke site is more than 50 percent larger than the Bedford plant. It has an environmental permit required to spray finishing chemicals onto furniture.
“When we were looking to take some expense off the table, it wasn’t really an option to move the finishing line to Bedford,” Terrill said.
High electricity rates in Bedford played into the decision. “There’s been some rapid utility rate increases,” Terrill said. Electric bills “are nearly double what they are in our (Roanoke) facility.”
The city, unlike Bedford County, is not on the Appalachian Power Company system. It has a hydroelectric generator on the James River and buys whole-sale electricity to meet the city’s peak electrical demands.
Kolakowski said the wholesale electricity market is not regulated, making APCo’s regulated rates less expensive.
Frank Chervan Inc. already has begun discussions on how to put the Bedford facility to use for someone else. “We’ve had some discussions, both with some other area businesses (and with the city). There’s a lot of ideas on the table, but there is not a cer-tain plan right now.”
He said the Bedford facility is more marketable than the Roa-noke factory would have been. “Not that any industrial property is marketable now,” he said.
The company told employees about shutting down of opera-tions on Tuesday. Employees have until Dec. 19 to choose whether to apply for a job at the Roanoke plant.
Terrill said that possibly half of the employees in Bedford could be transferred to Roanoke, but the final decision could be different.
Kolakowski said the city is working with the state and several agencies to help the workers who end up unemployed.
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Reader Reactions
Mike.. you know what really is sad?
Two Americans arguing about a furniture manufacturer closing down and the microreasons given. The real reason.. and you do not have to look far for a reason why. The furniture business next door buys material that this plant produces.. but they buy it from a plant in China.
Unless something drastic happens we as a country are a a sharp slide down. We can not compete with workers making $8 a day.
Look at the stats
China: 1 billion and counting, they do not care about the environment, they do not pay OUR taxes or OUR social security, they import our wood at a higher price than the furniture manufacturers in High Point North Carolina and ship back furniture almost as cheap as the original price of wood. Also, the premise of our politicians arugument to allow China to take our “unwanted” jobs is horrifyingly WRONG.
To think Chinese will be happy to wash our laundry for eternity (and for nearly free) and they will buy our big expensive gizmos forever. No they will move up, get educated, improve and thus compete with us on every level. Why is our leaders helping another country compete with us?
Clinton good rid of the tarriffs.. why I have no Idea. Bush still allows it to happen. I didn’t vote for Obama but if he wanted change then this is where to begin. If it raises prices fine.. I’ll pay more if my neighbor can find a job.
Look around and our lifestyle is falling no improving. This plant has been around a long time. Think about it.. they already should have paid for the building by now but haven’t. This is not the UAW and these folks make a normal solid salary. Southside VA has low taxes yet over 50,000 jobs left in 10 years. Why? Cheap and I mean cheap labor.
no jouxster, im self employed. that means i have no benfits, other than what i pay for out of my own pocket - and guess what… im an INDIVIDUAL. Guess you just didn’t look hard enough. so you see, i know better than most what healthcare really costs, and guess what - i still pay for it.
the point is that healthcare is a luxury, not a right. much like owning a car is a luxury, not a right. people dont have RIGHTS to buy things. they have the luxury of being able to make choices on which products to consume based on the markets they choose to consume from.
so when it comes to plant closings from benefits, no one is blaming workers for HAVING health insurance, but its another matter entirely to DEMAND them in return for working.
further, the workers in the UAW have the power to overturn the union. the voters could make michigan a right to work state, then - guess what - the auto makers wouldnt have to chose between going out of business and having their throats slit by their own workers.
toyota workers are non-unionized and work for half the hourly wage of UAW workers, and for decidely less in health benefits. oh, and here’s something else… benefits are just that… BENEFITS!
so if you’re sick of people crapping on American workers, maybe american workers should stop crapping on american workers. there’s a thought. why are jobs going overseas? b/c people demand higher minimum wages. (here’s a thought, either get a better education, or find a different job)
and yes, it IS ok to blame the worker, if they don’t like their compensation, they are free to *GASP* find another job!
Yes Mike.. let’s blame the workers and their families for having health insurance. Find another way? Let’s see, as an individual I can’t seem to get insurance as cost effective.. oh wait.. I simply CAN’T get health insurance as an individual. You know.. health is more important than anything. When I was working for myself and paying for insurance I couldn’t get it until my insurance agent lied on the forms to help me get it. He lied.. I’m sure some law was broken. Alert.. Alert.. Find that man who had insurance as an individual. Newsandadvance tell me who he is so we can get him.
I’m sick of people crapping on American workers, their families, their insurance, etc. In times past we as Americans got sick of excess taxes and making laws to hurt us.
Exampbe, doctors whose cost are NEVER KNOWN until the bill arrives. For once I’d like to walk into a doctors office and see prices for the basics overhead like you see at McDonalds. Not hidden and given to you as you walk out. Most people would rather see a menu and price out what they will eat. If fillet mignon is too expensive, then we’ll order a hotdog.
Our Commonwealth has created a system where doctors don’t have to disclose cost up front, tell doctors what they HAVE to do, and allow frivilous lawsuits to go forward.
High taxes and energy cost that IS outragious in ‘Bedford City’ is the problem.
But to Mike.. it’s okay to blame the worker. Fine, since due to these economic times.. take it away from government workers then. You hear that drop in the background.. that’s the sound of people whose jobs are so secured with great benefits getting pissed and stating “Well now.. let’s not get irrational here..“
well certainly benefits, etc… cant be the problem. I mean just look at the carmakers. Certainly the UAW isn’t to blame for holding a knife to the carmakers throats in exchange for $78.00/hr and $1200 in health benefits.
People want to think of health insurance as a right, but in fact, not only is it not listed in the declaration (life, liberty and pursuit of happiness) but its not in the constitution or the bill of right either… hmm.
Bet those workers would be happy to give up some health benefits in order to keep their jobs. I know I’d find another way to have health insurance if it were me.
Bedford City’s energy cost are rediculously low! It can’t be a problem with this business. Right.. right?
Truth, it’s as expensive as Southside Energy. Bedford City doesn’t produce it’s own electricity yet it sells it? Yup.. it’s the middle man who does nothing more then increase the cost for us living in the City.
Another interesting tidbit.. Bedford City was the only locality here in Central Virginia with a 3% population DECLINE. Everywhere else had growth. Maybe it’s time to look in the mirror and instead of saying “I’m good enough, I’m smart enough, and gosh darn it people like me” the people in charge should say what is wrong and how to fix it.
The plant is shutting it’s doors because of rising health care costs? Why not cut the health care benefits? Health care will be free for everyone after January 20th. This company must not have gotten the memo.
If people were really paying attention to stories like these, we would start tackling the real problems w/rising healthcare costs instead of making empty promises to addresss the matter. We cannot continue to become a nation that doesn’t manufacture anything.
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