RICHARD PIERSOL / Lincoln Journal Star | Posted: Wednesday, August 30, 2006 7:00 pm
AUBURN — A year ago, Auburn Consolidated Industries, a manufacturer of commercial lawn mowers in this Nemaha County town, appeared to be going great, buying other companies’ assets, expanding, installing laser cutters and robotic welders, planning to latch on to some of the state’ government’s expansion subsidies.
Gov. Dave Heineman, promoting his Nebraska Advantage set of business expansion incentives, visited in July of 2005, got a photo of himself riding a mower and described the company as just the type Nebraska needs to hang onto.
Now, the company has been partially shut down for a couple of weeks and will stay that way for the time being, the company told employees this week. Sixty people who were laid off temporarily, roughly half the recent work force, are laid off indefinitely and 14 are laid off permanently, the company said.
Last year the company reported more than 200 people working there, and plans for lots more.
Steve Skaggs, one of the owners, blames depressed sales of mowers and other equipment caused by drought in its nationwide market.
“It’s impacted our entire industry,” said Steve Skaggs, one of the owners. “Sales are flat or down in all segments.”
Skaggs said he hopes those people who lost their jobs can be recalled if things get better.
Two months ago, the company said, ACI reduced production from 40 hours to 30 hours per week and salaried employees took a pay cut.
Auburn Mayor Bob Engles said Thursday he was just out by the plant on U.S. 75 on the south edge of town, and what he saw encouraged him. There were cars parked in the factory and office lots.
“I had heard they are going to be continuing to operate with a reduced force,” he said. “They have some orders in for other types of equipment, possibly. I consider that good news because the doors are still open.”
Engles said he, too, understood from the company that drought had a direct impact on their sales.
He hopes they can work through excess inventory.
“Fortunately we have a number of other employers, Magnolia Metals, Armstrong Cabinets, Peru State College, the Cooper nuclear station,” Engles said. “We’re hopeful. Most places are always looking for good employees.”
But there is the nagging fear that what started as a partial, temporary reduction of production might become permanent, and a serious blow to this town of just over 3,000 people.
“There’s always worry in the economic development game,” Engles said. “ This is certainly not a situation we’d like to see.”
The company said it is planning initiatives to sell inventory and is preparing to introduce innovative new products to the marketplace this fall.
Terry Giles, manager of the Auburn Chamber of Commerce, said the she’s optimistic the layoffs will be only temporary, because ACI is a very important company to Auburn.
ACI has not had any plant shutdowns in several years, Skaggs said, and the company’s last layoffs were in 2002.
Auburn Consolidated opened its doors 80 years ago as a blacksmith shop and transformed itself into a fabrication and assembly factory using laser-cutting, robotic welding and powder paint technologies.
John Skaggs purchased the company’s assets in 1976 and changed the name to what it is today-Auburn Consolidated Industries Inc., according to a company history. That same year, Skaggs formed a partnership with Kubota Corp. When Skaggs died in September 1998, he ownership became a joint venture between the Skaggs family and Kubota. The Skaggs family purchased the Kubota shares and, as of last year, owned 100 percent of the company.
Journal Star reporter Al Laukaitis contributed to this story.