This week's layoffs at the Cirrus Design Corp. plant in Grand Forks are the most recent in a string of local layoffs in recent months -- signaling that the struggles of the national economy may have finally begun to be felt here.
Cirrus laid off 30 workers at its Grand Forks plant Tuesday after 29 were laid off at the plant the previous month. The layoffs of about 20 percent of Cirrus' workforce since September -- including larger layoffs at its larger Duluth plant -- were the result of declining demand for its aircraft, Cirrus officials said.
"I think the economy's downturn is starting to have some impact," said Keith Reitmeier, regional manager of Job Service North Dakota, who works out of a Grand Forks office. "But it is a very small impact. When you look at us compared to other places, we're in pretty good shape here. We still have a strong and vibrant local economy that is creating jobs."
The unemployment rate in Grand Forks was a relatively low 2.9 percent in September, up from 2.5 percent a year earlier, with overall employment up slightly from 31,367 to 31,988 in the past year. Grand Forks County's unemployment rate was 3 percent in September, up from 2.5 percent a year earlier, and overall county employment was up from 38,295 to 39,053 during the same year-long period.
"It is definitely the national picture starting to impact the local economy," said UND economist David Flynn, who is director of the university's Bureau of Business & Economic Research. "What were going to see happen is a slowdown, but I don't think we're going to have a major impact in North Dakota. It should not manifest itself in widespread layoffs or unemployment in North Dakota. I think North Dakota will ride it out."
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Cirrus optimistic about future
Despite the struggles of the larger economy and a decline in demand for its aircraft, Cirrus President and Chief Operating Officer Brent Wouters remained upbeat about the company's long-term future Wednesday.
"There is an amazing level of activity going on out there that people wouldn't believe, given the financial (turmoil)," Wouters said.
Wouters said Wednesday that no further large reductions in numbers of employees have been contemplated at Cirrus.
"We are really close to where we need to be," he said. "We will be doing some restructuring, small things that don't make the papers."
The Grand Forks plant is "every efficient," Wouters said Wednesday. Earlier announced plans to cope with reduced demand by reducing the work week from four days to three days have been put aside, he said. The plants in both cities will continue to work four-day weeks of 10-hour days, Wouters said.
Local layoffs on the rise
Earlier this year it was announced that the North American Foods dehydrated potato flake processing plant in Grand Forks would close as part of industry consolidation, costing about 125 workers their jobs.
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Another 30 workers at the J.R. Simplot potato processing plant in Grand Forks were laid off in August, the result of increased automation, company officials said.
Devils Lake-based food company Pugsley's also has announced that it will temporarily lay off 25 workers by the end of this week after a customer declined to renew a contract to purchase muffins from the company.
In July, Motor Coach Industries laid off 40 hourly workers at its Pembina, N.D., assembly plant as a result of fewer orders. The company has since filed for Chapter 11 bankruptcy protection.
"With the unsettled economy we've got going on right now, we expect there might be some smaller layoffs," Reitmeier said.
But Reitmeier said the local job market -- which has more jobs than takers -- has been able to absorb most of the recently laid off workers. He said Job Service North Dakota added about 200 new local job listings last week and now has more than 1,000 open unfilled positions (statewide there are more than 14,000 unfilled positions).
"Maybe we're the best place to be if you lose your job, because there is generally another one we can set you with another one right away," said Reitmeier, who said many laid off workers have been able to find comparable jobs that fit their job experience with similar salaries.
He said local employers are still hiring, with employers like LM Glasfiber replacing workers who leave and some employers recalling workers involved in minor layoffs.
Local Cirrus plant down to 233 employees
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After 30 employees were laid off Tuesday at the Cirrus plant in Grand Forks, there are 233 people working in the plant, Wouters said. In Duluth, after 75 were laid off Tuesday, there are 872 currently employed, bringing the total workforce to 1,105.
Wouters said the layoffs were "more targeted," this week, compared with more "across-the-board," layoffs in early September, based on investments in certain areas of their production. But he said the lineup of aircraft models being produced hasn't changed.
While demand definitely is lagging, compared to a year ago, he said "we are in the position where we want to be, to grow and grow profitably. I'm optimistic we are right on track."
The Grand Forks plant is "every efficient," Wouters said Wednesday. Earlier announced plans to cope with reduced demand by reducing the work week from four days to three days have been put aside, he said. The plants in both cities will continue to work four-day weeks of 10-hour days, Wouters said.
Schuster covers business. Reach him at (701) 780-1107; (800) 477-6572, ext. 107; or send e-mail to rschuster@gfherald.com .
Herald reporter Stephen J. Lee contributed to this report.
