Indian
Island Mill Announces Layoffs
By Deborah Turcotte Seavey, Of the NEWS Staff
BANGOR — Olamon Industries, which once employed 190 people on Indian Island, will be systematically laying off most of its remaining 49 employees this month while it looks for a buyer or ceases production of its plastic molding products.
The options on what to do with the company are few, but its general manager is hopeful something will happen soon to re-employ some or all of the workers who show up daily to make precision molded products for the automotive, electronics and audio industries. Olamon has hired a financial adviser to study whether to sell the business, enter into a joint venture with another company or cease production altogether.
Olamon general manager Al Marquis said Thursday a company he would not name has expressed interest in possibly buying the facility.
“Something already is starting to surface,” Marquis said. “We’re hoping there’s going to be interest out there. We’ve communicated this to all our customers.”
This week, a number of the 49 employees received pink slips. More will get their layoff notices May 11 and another group will receive notices May 18. A bare-bones crew of up to 10 people will remain at the facility as it reduces its inventory of raw materials by making products to sell and ship.
The increasing price of raw materials due to rising oil and energy costs and a slump in sales because of a slowdown in automobile and music purchases are factors in the company’s decision to begin “winding down” production, Marquis said.
“I’ve been in manufacturing all my life and it’s a constant battle,” he said. “I’ve seen people go by the wayside.”
Marquis said he believes plastic and energy producers are limiting their supplies in order to raise their prices and profits. The impact of this alleged action is higher retail prices, a decline in sales and the layoff of employees at manufacturing plants such as Olamon, he said.
“It’s done intentionally,” he said. “It’s a small industry. It touches us all.”
Olamon’s plastic products include music cassettes, audio boxes and the jewel cases that store compact discs. It also produces the Panther portable rapid-deployment security system; a tactical landing light system used by pilots flying either fixed- or rotary-wing aircraft; and a number of plastic parts.
Recently, however, one of the most profitable products has been a children’s toy called “Block-N-Roll,” which is “the only patented horizontally integrated marble maze on the market today that is compatible with all leading plastic building blocks,” according to the company’s Web site. It is sold by Taurus Toy Corp.
“We’re looking at that as possibly continuing on,” Marquis said.
A slump in audio sales was expected, Marquis said. What was not planned was a surge in energy prices and the overall impact the energy market has had on many industries that use Olamon’s products.
“It has put us in a position of weakness,” he said.
Olamon Industries, the recipient of the 1998 Maine Small Business Administration Minority Business of the Year award, will not be filing for bankruptcy protection, Marquis said. Instead, it will continue to convert raw materials into products while it reduces costs and staff.
“Certainly we’re doing this because of our financial situation,” he said. “But we are doing this voluntarily in a controlled setting.”
Olamon was started in 1984 by the Penobscot Indian Nation and Alnabak Enterprises, the tribe’s financial institution. The company’s charter states that Olamon was to help provide employment in high-tech manufacturing for area residents. Up to 30 percent of Olamon’s workers are members of the tribe.
The Penobscot Nation is “disappointed” with what is happening at the company, Marquis said.
“They also realize you can’t continue indefinitely,” he said.
Barry Dana, tribal governor of the Penobscot Nation, said his community has looked to Olamon as an important employer.
“We regret Olamon’s need to institute layoffs, but we wish them well in finding suitable solutions for its current situation,” Dana said in a statement.