AirBoss of America Corp.'s decision to cut most commercial footwear manufacturing in favor of specialty and military protective goods may result in about 200 layoffs at its Acton International Inc. plant by year-end
The precise number of layoffs has not been determined, CEO and President Robert L. Hagerman said, and the company has not decided when it will make the cuts, stating only that they likely will occur by the end of 2004.
"It all depends on how well our military and firefighter product lines are doing and how many employees will be needed to produce them," he said. However, he said the figure looks like it will be around 200.
In April, Hagerman said the rubber mixer and product maker would reorganize its operation in Acton Vale, Quebec, which houses Acton International, to eliminate some unprofitable footwear lines and outsource other consumer lines to China.
The company already is importing children's boots from China, and the winter weather boots it expects to outsource would be marketed primarily in Canada.
AirBoss is making the move because its prime competitors now outsource most of their production, putting the Newmarket-based company at a disadvantage.
Acton International will focus on manufacturing military products and firefighter protective gear-including nuclear, biological and chemical protective footwear, gloves and gas mask components-which were highly profitable during the last year. The subsidiary will expand those lines along with a few consumer products, such as winter boots and overshoes for industrial applications, Hagerman said.
It will outsource production of less popular winter boot lines to China, which will result in the sale of about $3 million worth of equipment, the largest piece being an injection molding machine, he said.
That will lead to the layoff of production workers. Hagerman said it's difficult to put a number on it right now, but it's possible some personnel could shift to jobs that tie in with the manufacture of military and firefighter goods at Acton Vale.
In addition to producing NBC goods at the 250,000-sq.-ft. Acton Vale site, Acton International will continue its rubber mixing and calendering operations for industrial applications at the plant.
The company's primary mixing and compounding facility is in Kitchener, Ontario, where it also molds and produces NBC wear and components.
AirBoss is coming off a relatively good year but only a so-so fourth quarter. Net income for the first quarter fell slightly to $449,160 from $510,720 on sales of $36.7 million, which were on par with those recorded last year.
Sales volumes of rubber compounds increased by 17 percent to 38 million pounds from the same period last year and by 40 percent from the fourth quarter of 2003, the company said in its first-quarter earnings report. That trend has continued into the second quarter, it said.
However, the firm cautioned, natural and synthetic rubber material costs continue to run high and are expected to remain that way or drift upward in the immediately future.
AirBoss noted that all its divisions are operating profitably and cash flow from operations reached a two-year high for the first quarter. It anticipates improvement in 2004 over the last half of 2003.