No bonuses for Marvin Windows workers for third consecutive year
GRAND FORKS - Unlike competitors Andersen Windows and Pella Corp., Marvin Windows will not be laying off workers or closing factories.
However, Marvin employees will not be receiving a year-end bonus for the third consecutive year and only the sixth time in 55 years, with future prospects also dim.
"I always have hope, but I think we're in for a very long recovery period," said Susan Marvin, company president.
Those are the headlines in an interview with Marvin, who remains upbeat about her company even though the country is experiencing, in her words, a "housing depression, not a housing recession."
With a glut of repossessed homes on the market with deflated prices, there's little market for new building.
Still, the manufacturer based in Warroad, Minn., is drawing a line in the sand on layoffs, unlike its competitors. Andersen Windows recently announced plans to lay off 250 workers in its home base in Bayport, Minn., two years after more than 500 layoffs.
And Iowa-based Pella Corp. recently announced it would close a South Carolina plant with 145 workers this year and a plant with 158 workers near Cincinnati in 2012.
Nationally, window shipments have fallen sharply since 2005 and are expected to fall 9 percent this year, according to the Window and Door Manufacturers Association. Also, replacement windows are high-ticket items.
That won't translate to job layoffs at Marvin's, however.
"There is absolutely no reason to think there is going to be a layoff at any of our (10) plants," Marvin said. "Our priority is to keep the workforce on payroll and make sure they have really good health care benefits. We have no reason to think we won't be able to continue doing that."
More short weeks
Marvin's expense-cutting moves have included lowering manager salaries, eliminating 401(k) contributions and student tuition and cutting travel. The biggest savings have come from longer stretches of cutting the workweek from 40 to 32 hours.
While a 32-hour week has been fairly routine at Marvin's for the first three months of most years, it has grown to close to half the time for the last three years. Overtime, almost routine during boon times, has mostly dried up.
"We've looked under a lot of rocks to find our pennies, and they all add up," Marvin said.
The rocks have not included lower health insurance benefits or layoffs, however. That decision was made as a business strategy more than an act of compassion.
"We say people are our greatest assets, so why would we cut our greatest assets? Having no layoffs has been an even more powerful strategy than we thought it would," Marvin said.
"When you don't have layoffs, you don't devastate company morale or the community. So we've been able to keep the quality of the product and service at a high level. This strategy worked because we had a workforce working as a team, with everybody willing to give something to ensure that the person working next to them had a paycheck and health care benefit," she said.
Despite no layoffs, Marvin's employee ranks are thinning through attrition. Except for specialized jobs, the company is not replacing retirees.
Marvin says the company-wide workforce is about 4,400, approximately 1,000 fewer than its peak.
"Our annual attrition rate runs typically between 5 and 10 percent," Marvin said. "If we can avoid hiring a replacement, we will."
Attrition is one thing. Layoffs are another.
"If you treat your employees right, they'll treat you well," Marvin said. "We have a very loyal workforce and very loyal customers."