Western Forge cuts 40 jobs in Springs

Western Forge laid off 40 of its 580 Colorado Springs employees last week in a bid to become more efficient amid slowing sales and to better compete with overseas hand-tool manufacturers, company officials said Monday.

The cut amounted to 7 percent of the company's local work force and included both management and production employees, said Glenn King, who became Western Forge's general manager in June. The move comes despite winning a $3.5 million contract to produce screwdrivers, handles and adjustable wrenches for the professional tool division of Washington, D.C.-based Danaher Corp.

Western Forge has a long history in the Springs; it was started in 1965 in Defiance, Ohio, but moved here a year later. The layoff marks the latest blow to the local manufacturing sector, which has lost nearly 40 percent of its jobs since the end of 2000.

"Our renewal strategy addresses the dual challenges of long-term global competition and the current tough domestic economic conditions," said Dave Doster, chief executive of MW Universal Inc., which bought Western Forge last September. That strategy includes "implementing modern, lean principles to serve our customers efficiently, matching the organization and work force with current business realities and developing new customer segments."

Western Forge cut its work force despite the contract, which could eventually grow to $5 million a year in revenue, because production doesn't start for three or four months, said Fred Radtke, Western Forge vice president of sales and marketing. The Springsbased company also had to cut costs to better compete against overseas producers and win additional contracts, he said.

Rather than fulfill customer orders from already manufactured inventory, King said Western Forge wants to produce hand tools when ordered by customers that include Sears and Home Depot. The company's local plant is producing at only about half of its peak production capacity, generating about $80 million a year in sales, he said.

"You can't just keep throwing volume into an inefficient process. Our plant has suffered from too much downtime due to lack of investment and preventive maintenance on our equipment," King said. "We had a lot of long, hard decisions on what to right-size. We had to do things we had hoped we wouldn't have to do. But you either give up and liquidate the factory or you do what you have to do to compete."

Western Forge is bidding for a $15 million U.S. Defense Department contract for adjustable wrenches, pliers and screwdrivers used by military mechanics that is scheduled to be awarded as soon as next week, Radtke said.

The company is recruiting for seasonal workers it plans to hire late next month, but King said Western Forge is changing worker schedules and asking employees to work overtime so it can "avoid the cycle of hiring, then laying ofi people." The company's sales typically increase in the fourth quarter, when it begins shipping for the holiday season.

King is a veteran of competing with overseas manufacturers - he spent 17 years with Ford Motor Co. in various financial management and strategy planning executive posts in Michigan and the United Kingdom before becoming a consultant in manufacturing processes and financial restructuring. He replaced Barry Baum, who retired, as president and general manager of W Forge Holdings Inc., which operates as Western Forge.

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Contact the writer: 636-0234 or wayneh@gazette.com