Even periods of economic prosperity cannot shield workers from layoffs, the "creative destruction" of capitalism, a business professor said.
Two of Lawrence's largest private employers recently slashed dozens of employees from their payrolls, shattering the myth that a steamrolling economy and rock-bottom unemployment rates ensure job security and continued growth.
Anything but.
"You get a lot of structural change," said Doug Houston, a Kansas University business professor who studies human resources. "It's a fairly dynamic economy now. We have firms rising and firms falling. At any given time the economy is in flux.
"It's unfortunate when you have disruptions, but that is the dynamics of capitalism. It's creative destruction."
That's because even during periods of unprecedented economic prosperity, companies still face pressures to produce efficient operations and quality products. For every company that makes an improvement, one or more related businesses correspondingly fall behind. Even an entire industry can take a hit.
Fertilizer, pharmaceuticals
Farmland Inc., the largest farmer-owned cooperative in North America, eliminated 102 jobs Friday at its Lawrence fertilizer plant, blaming an industrywide supply glut in a sluggish market for agribusiness. Even after cutting the plant's production earlier this year, Farmland's fertilizer inventories remain up 67 percent from a year ago.
Only about 30 hourly workers will remain, mainly to move out remaining inventory and secure the 500-acre plant. Once the rest of the plant's anhydrous ammonia and urea ammonium nitrate is gone, other losses could follow.
"We'll make another decision," said Dick Lind, the plant's manager. "We may have another reduction in personnel."
Across town, Oread Inc. last month told 55 Lawrence employees -- and an additional 142 across the nation -- that they no longer had jobs because of the most basic of business problems: too much spending and not enough earning for the company during the previous eight months.
The Lawrence-grown contract pharmaceutical giant had added 120 employees this year without a corresponding increase in revenues, a sure-fire prescription for cuts.
'That's corporate business'
"I really hate this, but if your revenues are down and your spending on payroll is up, there is only one answer," said David Kimbrell, who slashed Oread's payroll less than a week after repurchasing the struggling company. "That's corporate business."
While Houston figures the recent job losses will be "fairly rapidly absorbed" by the area economy -- this year's monthly unemployment rates averaged 3.8 percent through July -- that doesn't necessarily soothe the sting felt by employees who showed up for work one day and found themselves scouring want ads the next.
Jenna Johnston is still struggling.
Oread laid off the purchasing supervisor a month after she closed on the purchase of her first home, a $64,000 four-bedroom fixer-upper in North Lawrence.
As she missed her first mortgage payment last week, Johnston planned to spend Labor Day worrying about her future, and which temp jobs she might be able to land while awaiting word on applications already sent out.
After 2 1/2 years working for a company that peaked with $83 million in annual sales and a growing stake in the burgeoning contract-pharmaceutical industry, Johnston just can't see how she got squeezed.
Tough to swallow
"I kept that system going, from doing maybe three purchase orders a day to 20 purchase orders a day or more," she said. "I thought we were just going gangbusters, up to maybe nine months or a year ago. We were buying all these companies. A year ago there wasn't any question about buying 100 PCs, or needing to buy lab equipment. There was just no problem whatsoever.
"Now, I don't know. I don't know what to tell you. " You'd think Oread would be a big enough company that your job would be secure.
"It wasn't."
While Oread's laid-off employees had less than a day to prepare for being unemployed, workers at Farmland had two months to prepare because the company sent out notification letters to union members.
In the interim, a few accepted transfers to another, newer plant in Coffeyville, while a handful of others opted for retirement. Only the plant's most senior hourly workers -- those with at least 26 years of service -- survived the cuts, and even those will be retrained to learn basic responsibilities they either never expected or left behind long ago.
The situation pains Lind, who previously had seen staff reductions at the plant in 1986 and 1983. He knows the familiar smell of ammonia will soon be but a memory, as the last of its 4,000 tons are hauled away early this week.
He calls the layoffs "tragic," knowing there was little that could be done to hold them off. His frustration is obvious.
"Plants are supposed to run, and make products and make sounds," he said last week, standing in silence atop a hill overlooking the ammonia plant. His eyes watered slightly.
"Hopefully we can get this thing running again."
-- Mark Fagan's phone message number is 832-7188. His e-mail address is mfagan@ljworld.com.
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