Algoma Hardwoods Owner Announces Plant Closing

You thought you had a bad Election Day?

Meet Jeff Wiswell, administrator of the City of Algoma.

“We started off the day at 7 am with the polls opened, and at 8 am, a fellow driving a truck to haul away a dumpster behind city hall, close to the new Algoma Elementary School remodeling project, lifted up the bed of his truck too soon and ripped out electricity, Charter and telephone from city hall,” Wiswell said.

But that didn’t stop the voting.

“We never missed a beat. Immediately, people, of which there were a lot, flipped their phones, their pocket flashlights,” Wiswell said. “We went to the hardware store and got lots of lights.”

They eventually jury-rigged an old generator in the basement of city hall. It wasn’t until 10 pm that city hall was hooked back up to the grid.

All of that was on Wiswell’s shoulders. But there was more.

“It was about 2 in the afternoon, I get this fax out of the blue from Algoma Hardwoods saying ‘This is to let you know we’ll be closing the plant on Jan. 17th,’” he said. “The mayor rolled in about a half hour later and he did not look happy. He goes, ‘Wow, what an extremely excellent day,’ which basically meant, ‘This sucks!’”

Algoma Hardwoods began in 1892 as Ahnapee Veneer and Seating. As Algoma Hardwoods, they were a leader in producing wood-faced, mineral-core fire doors, and eventually expanded to produce other special-purpose doors.

Algoma Hardwoods has been owned since 2012 by Masonite International Corp., who bought it from an Evanston, Ill. private equity firm, which had owned the company since 2006.

Tucked into Masonite’s third quarter report released on Nov. 8 was an item announcing a restructuring plan that would close an unnamed manufacturing facility. That would be Algoma Hardwoods.

“We delivered our tenth consecutive quarter of double digit adjusted EBITDA [earnings before interest, tax, depreciation and amortization] growth with positive performance in all three reportable segments. At 12.9 percent, our year to date adjusted EBITDA margin is the highest it has been since 2009,” said Fred Lynch, president and CEO of Masonite. “Our strategic initiatives and purposeful investments are reflected in our solid performance.”

Just as an FYI, as President and Chief Executive Officer at Masonite Lynch made $7,670,956 in total compensation in 2015. Of that, $905,192 was received as a salary, $2,022,020 was received as a bonus, $4,729,893 was awarded as stock, and $13,851 came from other types of compensation. This information is according to proxy statements filed for the 2015 fiscal year.

What it means to the city of 3,100 residents is the loss of 180 jobs that pay between $15 and $20 an hour, Wiswell said.

“It’s a huge deal,” he said. “It obviously means the loss of income for our people and it means the loss of their current lifestyle, their hope. It’s a real unexpected occurrence for each of these people personally, and for the city.”

Wiswell said the city is still trying to figure the economics of the plant closing.

“Eventually it will mean something on the property tax bill because right now that facility is taxed as a working manufacturing facility,” he said. “Once it winds down and there’s no work, then it’s just wood and bricks sitting on dirt. The value will be less than what it is today. We’ll know more about that down the road. It also means less electricity, sewer and water. How much? We don’t know. We’re still trying to figure that out.”

Wiswell said the Bay Area Workforce Development Board has a lot of experience working with displaced workers, and they will conduct a survey of employees to determine skill sets and other important factors in finding new jobs.

“We’ve received calls from other areas, saying we’ve got jobs in this part or that part of the state. It’s easier said than done for people to sell a house and move somewhere when you’re 45 to 55 years old,” Wiswell said. “The big thing is really to concentrate on getting an awareness of what the situation is before they take the first job that comes along. One of the things that is positive is there are a lot of employers hungry for workers, but it’s very important the workers just take a look at what some of their future options are.”