News, notes, and observations from the James River Valley in northern South Dakota with special attention to reviewing the performance of the media--old and new. E-Mail to

Tuesday, February 7, 2017

Good story with a fatal flaw: jobs lost in Aberdeen

Covering business news is the stable-cleaning job of journalism.   I know.  I edited the business section of a newspaper once.  It's a lousy job because most of sources are unreliable.  If things are going well, they exaggerate.  If things aren't going well,  they lie.  Or cover up as best they can.

Things aren't going well for the Molded Fiberglass plant in Aberdeen.  They announced a "substantial" layoff at their plant.  The Aberdeen newspaper announced it this way:

"Due to an unexpected reduction in customer orders, Molded Fiber Glass of South Dakota is reducing its staff at the Aberdeen plant effective (Monday).”

The news story did a good job in covering how the layoff is being handled.  The Dept. of Labor sent in seven people to help the laid off workers process their unemployment and prepare to look for other work.  The story also did a good job of outlining the impact the  layoff will have on the work force and in profiling the kind of people affected.  

What the story did not contain was an exact number of the people thrown out of work.  It quoted a number of sources who only said it was "substantial."  The company, of course, knows exactly how many people it plans to dump.  The Dept. of Labor gets the number from the company, as do local officials.  The use of the vague term "substantial" is a bit of a fact-and-ass-saving device.  The company does not want the public to know the exact impact of the layoff.  That caused a commenter on the news story to snark a bit:  "like a 190 people...and the paper cant find that out...."

Why would not a company be precise about the impact?  Because it calls into question how well the company is run,  how well it is doing.  The clue is in the phrase "unexpected reduction in customer orders."

The troubling aspect of that statement is that the renewable energy market is in a state of growth  A CNBC story states:
In its latest Annual Energy Outlook, the U.S. Energy Information administration projected renewable energy consumption will grow faster than any other source through 2040, because capital costs fall as more solar and wind farms crop up and federal and state policies encourage their construction. 
The story states this rosy outlook despite Trump's vow to restore the nation to a fossil fuel energy basis.  

So, why a reduction of orders in a growing market?  Some problems with the product?  Some problems in selling to a strong market?  Management problems?

Aberdeen is a city that does not have a good history with companies that set up shop here.  The Aberdeen American News has does a fine job of tracking the record.  The one thing it leaves out is the call centers that have popped up, then vanished.  But here is an outline of the history of Molded Fiberglass and an accounting of businesses that have closed down and the effect those closing have had on the labor market.  (I reproduce it here from the American News for those who might be blocked by the pay wall.)

Molded Fiber Glass history
• Nov 19, 2007: Ground is broken on 332,700-square-foot facility on the Molded Fiber Glass facility. At the time, plant officials expected to employ 750 workers within three years.
• Oct. 20, 2008: Molded Fiber Glass rolls out its first wind turbine blade. "It's 37 meters long and weighs 12,000 pounds, but I don't know if it's a boy or a girl," then-plant manager Rob Dinsmore said.
• Nov. 19, 2008: First blades shipped for GE, sent to Council Bluffs, Iowa.
• Jan. 28, 2009: Molded Fiber Glass lays off 30 workers. About 220 people were working at the plant.
• March 12, 2009: Thirty laid-off workers are recalled to Molded Fiber Glass. The company also begins accepting applications.
• August 2010: The 500th 40-meter was produced at Molded Fiber Glass.
• Sept. 12, 2012: Molded Fiber Glass lays off of 92 of its 370 Aberdeen employees.
• Oct. 2012: 15 workers were recalled.
• June 2013: Instead of laying off employees while the company transitions to another blade, it pays employees do work on community projects at places including the 4-H building, Safe Harbor and SPURS Therapeutic Riding Center.
• Aug. 2014: An expansion plan was approved by the Aberdeen Board of Zoning Adjustment. In an email, Molded Fiber Glass senior vice president Dave Giovannini said the company has nothing to announce yet about the expansion and that it had requested the variance in order to maximize its options moving forward.
• Dec. 2015: Molded Fiber Glass announces it will expand, adding 15,000 square feet and 75 to 100 jobs by the end of 2016. At the time the location employed around 600 people.
Source: American News archives

Layoffs Aberdeen
Wyndham Hotel Group announced on Sept. 9, 2015, that it would be closing, which eventually put 240 employees out of work.
Midstates Printing Inc. eliminated 55 jobs on July 7, 2015, in anticipation of projected customer demand. It was a 19-percent cut in its workforce.
Northern Beef Packers laid off 260 employees on July 26, 2013. The plant had filed bankruptcy one week prior. Northern Beef Packers had previously laid off 108 people in April 2013, citing a lag in work.
Verifications eliminated 77 jobs in September 2012. Twelve remaining employees were given options to work from home. Fifteen people had been laid off in October 2012. At the time of the final layoff, Verifications also closed its Mitchell office. Officials said the company was going global and that facilities in India and the Philippines would better help international clients.
• An expiring tax credit led to the Sept. 12, 2012, layoffs of 92 workers at Molded Fiber Glass. That was about 25 percent of the workforce at the time.
Wells Fargo Auto Finance eliminated 66 jobs in February 2012. The cause was said to be a consolidation of two auto finance businesses within the company — auto finance and dealer services.
Hub City Inc. laid off 79 workers in January and February 2009. Officials said they hoped the cuts from the production shop floor would be temporary.
Midcom, an electronics manufacturer, closed its Aberdeen plant in March 2001; 190 employees lost their jobs. Midcom closed its Huron plant on Jan 6, 2001, and 73 people were laid off. A downturn in business and a slumping economy were cited as reasons for the closures.
Sheldahl closed in 1996 and had 125 to 130 employees at the time.
Imprimis, a subsidiary of Control Data Corp., announced in November 1988 that it would close its Aberdeen plant. Some 750 workers were affected, making it the biggest layoff in 30 years. The company had more plants than it needed, and the Aberdeen location was too far away from its customers, company officials said at the time. Other Midwest plants for the Minnesota company were also reduced or closed.

Source: American News archives

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Aberdeen, South Dakota, United States