Abrupt Closure at Semco Leaves 141 Jobless

January 3rd, 2020 by Kyra Thompson

The sudden closure of a Wisconsin-based door and window manufacturing facility put 141 workers out of jobs on the last day of 2019, according to a Worker Adjustment and Retraining Notification (WARN) notice filed by the company.

Semco Windows and Doors president Patrick L. Semling sent a letter dated December 30 to all employees announcing that the company would be permanently closing its facility located in Merrill, Wis., at the end of the business day December 31, 2019. The letter states that, “all employees are being terminated,” and that the plant would not open back up on January 6, 2020, as previously planned.

“Because of lack of orders, the inability to obtain further financing, insufficient cash, and the inability to sell the company as a going concern, we are unable to continue the operation of the business,” said Semling in the letter to employees.

Semling added that the company had been unsuccessful in its pursuit of additional financing and “was unable to provide any notice until now.”

The WARN notice was sent the same day as the letter to employees but was not stamped as received until January 2, 2020.

The federal WARN Act policy requires businesses with 100 employees or more to provide a written notice 60 days in advance of a dislocation event and the state equivalent. Wisconsin’s Business Closing and Mass Layoff (WBCML) Law requires the same for businesses with 50 or more employees.

According to the Wisconsin Department of Workforce Development’s website, “if an employer does not provide notice when it is required, affected employees may recover up to 60 days of back pay and benefits for each day that notice was required but not provided. Additionally, if an employer fails to give timely notice to the highest official of a municipality, the State may assess a penalty against the employer of not more than $500 for each day that notice was required but not provided.”

The WARN Act does allow exceptions to this timeframe, including businesses that are actively seeking capital or business and believe that the notice would preclude its ability to obtain that, and if the capital or business would help to avoid or postpone a shutdown.

Wisconsin legislature released a statement concerning the Semco closure in which Rep. Mary Felzkowski and Sen. Tom Tiffany expressed their disappointment at the news and support of employees who were affected.

“Our thoughts are with the hard-working employees who now find themselves in an extremely difficult situation. This uncertainty is stressful for these families, and we must come together to take care of our neighbors,” read the statement.

Officials further said they would be working to assist those affected in the job transition period.

This came as a shock to employees who claim there was barely any indications that the nearly 80-year-old company would shut down.

Former customer service representative Amy Rajek had been with the company for more than three years and her mother had retired from the company in 2010 after 43 years there.

“We in the office knew cash flow was an issue…” Rajek said. “But nothing this drastic—very upsetting.”

Rajek said that the company originally told dealers that production would be back on January 6, and customer service was told to come back on January 2. But later, a text from Semling informed customer service not to come in until Monday.

“At that point, that concerned me,” Rajek said. “Not even a coworker who works directly with Pat [knew] about this either.”

In years prior, the company was a community staple. In 2016, it was one of the top five regional businesses of the year by the North Central Wisconsin Regional Planning Commission and in 2017 it was identified as one of the Merrill’s top ten largest taxpayers.

However, Semco has been in a rollercoaster of financial standing since the 1980s revealed the Wisconsin Department of Financial Institutions’ (WDFI) docket of financial annual report filings. Businesses file annual financial reports through WDFI for financial institution reference and recognition, according to a WDFI representative. If the report is not filed, the status shows first as “bad standing” and if the business continues to fail to file, the status will drop to “delinquent” and eventually the institution will be dissolved as recognized by the WDFI.

Semco has dipped into bad standing or delinquent status a total of five times since 1983, as reflected on the WDFI docket. As of January 2, 2020, Semco’s status was delinquent.

This article is from Door and Window Market [DWM] magazine's free e-newsletter that covers the latest door and window industry news. Click HERE to sign up—there is no charge. Interested in a deeper dive? Free subscriptions to [DWM] magazine in print or digital format are available. Subscribe at no charge HERE.

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