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Recession leads to loss of bonuses at Marvin Windows and Doors

Customers of Security State Bank in Warroad wait in line to cash their profit-sharing checks from Marvin Windows and Doors in this Dec. 23, 2005, file photo. Grand Forks Herald file photo

GRAND FORKS - For only the fifth time in 54 years - but the second year in a row - Marvin Windows and Doors employees will not receive profit-sharing bonuses this year.

Typically, the family- owned manufacturer based in Warroad, Minn., announces the bonuses during its annual meeting, held on the last Saturday before Christmas. The news on Dec. 18, however, will be bad, though expected.

"It doesn't look like there will be bonuses," company spokesman John Kirchner said. "We need to get over this housing recession."

Kirchner added that next year may not be better.

A no-bonus year was anticipated because employees have had a 32-hour workweek for most of the last two years. The company opted for shorter hours rather than layoffs.

Workers have had 40-hour weeks the last six months and will continue with full schedules for a short stretch. But soon into 2011, after the usual seasonal rush of late-year orders, workers likely will return to four-day weeks, Kirchner said.

This year is in sharp contrast to 2005, when 3,500 employees shared a $50.3 million bonus, an average of $14,000 per person. That year's bonus pot was 2½ times the previous high of $20.2 million in 1988.

The big reason for the windfall bonus in 2005 was that Marvin Windows won $156 million in a lawsuit against a company that supplied a defective wood preservative from 1985 to 1988. The company almost went out of business because of the losses caused by the preservative. It lost millions because it replaced the faulty windows,

The losses meant that employees received no bonus in 1998 and their 1997 bonus was only because the family had made money in another endeavor, not in its manufacturing business.

The other two no-bonus years since 1957 came in 1961 and 1962, the result of a factory fire.

Although bonuses fluctuate with the roller-coaster manufacturing industry, most years have meant extra money just in time for Christmas shopping. Typically, since 1980 the 2,500 to 3,000 employees each have received between $1,000 and $3,000.