December 18, 2014

Elyria
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Invacare lays off 60 in Elyria

Invacare in Elyria on Wednesday announced layoffs. CHRONICLE FILE PHOTO

Invacare in Elyria on Wednesday announced layoffs of 150 associates and 40 temporary workers from its facilities, including 60 in Elyria. CHRONICLE FILE PHOTO

ELYRIA — One of Elyria’s largest manufacturers again is cutting its workforce.

Invacare Corp. announced Wednesday a layoff of 150 associates and 40 temporary workers from facilities in North America and Asia. The effect on the Elyria-North Ridgeville campus is 60 associates, said Lara Mahoney, company spokeswoman.

“We have been under significant financial pressure, as our last quarterly statement reflects,” she said. “We are restructuring and trying to put ourselves in the right financial picture.”

The employee cuts are effective immediately with the majority being salaried associates in various departments, Mahoney said. Some also are from the Taylor Street manufacturing facility in Elyria. A breakdown between hourly and salary employees was not available.

Mahoney said affected employees will receive severance and benefits packages that vary based on tenure with the company. This will be in addition to transition assistance and outplacement services.

Robert K. Gudbranson, Invacare interim president and chief executive officer, said in a statement the move to cut employees was made to increase cash flow and profitability.

“While the decision to downsize our workforce is extremely difficult, it is a necessary step toward achieving these objectives in light of our financial results for the first six months of 2014 and the slow sales start to the third quarter,” he said.

These layoffs are only the latest to rock Invacare. The international manufacturer and distributor of home and long-term care medical products headquartered in Elyria began shedding employees in December 2010 when it cut 143 employees after entering into a consent decree with the U.S. Food and Drug Administration.

Since then, dozens more employees were let go. Those who remained saw their hours reduced.

The company continues to comply with the consent decree, which called for three comprehensive third-party audits of its quality control systems to culminate with a follow-up inspection by representatives from the FDA. Mahoney said the company is in the midst of the third and final third-party audit.

“We passed our first two certification audits and we have some additional work to do to get through the third, but we are committed to the process,” she said.

That process, which reduced Invacare’s capacity to manufacture, has had a clear effect on the company’s bottom line.

Invacare is strong in Europe but sales were weak domestically and in Asia, according to the company’s second-quarter results announced in July. Mahoney said the company had an adjusted net loss for the second-quarter of $27 million.

More than 800 associates continue to work at the Elyria-North Ridgeville campus.

Mahoney said the plant continues to produce, although at a limited capacity, and investments have been made to quality control systems at the plant.

“We are committed to our turnaround. Unfortunately, reducing head-count is how we have to turn around the business,” she said. “But we are committed to making Invacare a strong company for the associates who remain, which is the reason why we are focused on restructuring.”

The restructuring is expected to generate $14 million to $15 million in annualized pre-tax savings when fully instituted in 2015. The company expects to incur restructuring charges not to exceed $6 million on a pre-tax basis.

Contact Lisa Roberson at 329-7121 or lroberson@chroniclet.com. Follow her on Twitter @LisaRobersonCT.