Ceramo lays off 77 workers; '03 twister blamed

~ The layoffs are permanent, the company president said.

Leroy Friedhof said the news he got Friday hit him "like a bomb." After 36 years of working at The Ceramo Co. in Jackson, the 55-year-old Oak Ridge resident and more than 70 others like him were told they no longer had jobs, victims of the biggest round of layoffs in the company's 60-year history.

"The writing was on the wall, I guess," said Friedhof, who worked putting bar codes on the red clay flower pots the company has made since 1945. "There was more money going out than was coming in. I guess it was just a thing they had to do."

On Friday, Ceramo laid off 17 full- and 60 part-time employees, leaving about 40 full-time workers at a company that has employed more than 100 people in the past, according to company president Vernon Kasten Jr. Kasten said the layoffs were permanent.

Ceramo generally manufactures and distributes 35 million to 40 million red clay flowerpots a year, Kasten said. In addition to its Jackson headquarters, Ceramo has a distribution center in Chicago and has customers in 21 states.

Kasten cited several factors, including increasing natural gas prices, the installation of new automated equipment and a decision to shift from seven days of operation a week to five.

But the biggest reason, Kasten said, was that the company never has recovered from business it lost as a result of the 2003 tornado that hit Jackson.

"We were virtually destroyed in 2003 in the tornado," Kasten said. "We were out of business for quite some time. When you're down for months and the people you supply have to have product, they go elsewhere. The customers that left have never come back."

Ceramo's facilities -- including the manufacturing building and two warehouses -- suffered several million dollars in damage and production was down for at least 12 weeks following the tornado.

The problem was compounded by insurance entanglements, Kasten said. Business interruption insurance has never been fully paid, he said, and Ceramo is suing the insurance company. Ceramo's insurance claim was the biggest in the city from the tornado damage, Kasten said.

All of that led the company to consider laying people off, he said.

"It was a tough decision," he said. "It was horrible. It's the toughest thing we've ever done."

On Friday, employees were told they were being laid off and the Missouri Department of Economic Development Rapid Response Team was on hand to help the so-called "displaced workers" to find new jobs. They were also given severance pay, Kasten said.

Kasten said the company wanted to do "all we could" to help their former employees find work.

The layoffs aren't, however, a sign that the company could close, Kasten said. It's just a tough decision during tough times, he said.

"You've got to do the right things in business to succeed, and we've done that," he said. "Others have gone through worse than we have. Tough times never last; tough people do. A business is a lot like a person. There are going to be ups and downs. You work through them. If you work hard and work smart, things will be great."

Ceramo is installing some new equipment, including a glazing machine that will allow it to make and distribute glazed pottery in many different colors, he said. Expanding its product line, he said, will no doubt bring in new business.

"So there are some positives," Kasten said.

There are few positives from Friedhof's perspective. Now, he says, he finds himself starting over at 55. But he has to go to work, he said, if for no other reason to get health insurance for him and his wife.

Friedhof was already spending $200 a month on prescription medications for his family even with the insurance. Friedhof takes medication for his diabetes, high blood pressure and cholesterol.

"Without insurance, I don't know what we're going to do," he said. "But I've got to go back to work, even if it's just picking up trash. If Ceramo could have just waited another five or six years, I could have retired."

Still, Kasten remains optimistic.

"We're going to grow out of this," he said. "Hopefully, we'll be bigger and better than ever."

smoyers@semissourian.com

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