CLAREMONT, N.H. - Clutching trowels and hammers against their plaster-speckled sweatshirts, workers filed out of the Customized Structures Inc. plant Friday afternoon for the last time, some 24 hours after they had been called into the cafeteria and informed that the company was closing down, four days before Christmas.
"Merry Christmas, huh?" Paul Boardman, 42, a five-year employee, called out to colleagues lingering outside the building - reluctant, it seemed, to leave.
In this long-struggling city of 13,000 on the border of Vermont, a job at Customized Structures, once New England's second-largest modular homes manufacturer, was a plum gig. While tough times had hit the housing industry, the company, which was purchased in 2003 by Watermill Group, based in Lexington, Mass., was afloat. At least, that was the impression employees said the company had given its 122 workers until the stunning news of closure.
"We came here and gave a good honest effort. And where did it get us?" said Dennis Rogenski, 53, who worked in transportation and installation. "Now we're left scrambling."
"I'm trying to look at this as an opportunity," said Brandon Elam, an eight-year employee. "But it's snakes in the grass. What else can you say?
Watermill, a six-partner private equi ty firm that buys and restructures companies, originally had planned to give no severance pay. But after an 11 a.m. conference call with Governor John Lynch and other state officials Thursday morning, Watermill officials relented.
Watermill managing partner Steven Karol called the governor shortly after 1 p.m. and said the company had decided to offer two weeks pay to the workers, Lynch and Watermill officials said.
Federal law requires that companies give workers 60 days notice, or comparable severance pay, in cases of a plant closing or mass layoff.
Lynch said Karol told him Watermill was concerned that refusing to offer severance pay would create a public relations nightmare and force the company to incur further legal bills.
Karol, 53, who owns property on Beacon Hill's Louisburg Square and Cape Cod, was traveling out of the country and not available for comment, said Nancy Sterling, a company spokeswoman. Sterling denied that Karol had discussed Watermill's image and legal costs with the governor.
Tim Eburne, 63, another Watermill partner, said in a telephone interview that Karol personally put up the $200,000 required for the severance pay. That sum brought Karol's personal investment in the firm to $1.2 million in 2007, Eburne said. The company had been struggling since 2006 with the downturn in the housing market. Watermill had hoped that with Karol's investment and others in the company in 2007, the following year would be better, Eburne said.
"But that string ran out unfortunately a little while ago, and we were forced to close it down and send everyone home," Eburne said.
Eburne said the company did not initially offer severance pay because it was out of money. Company officials opted not to give 60 days notice because the firm had been scrambling to find a buyer; at Thanksgiving, the company had several possible buyers and did not want to scare them away with news of layoffs, he said.
He said anger directed at Watermill is natural, but misplaced.
"I can understand anybody being laid off at this time of year being upset," Eburne said. "We had great employees there. We think we have done the very best that we can by them. Steve, myself, and all the other partners are devastated by this. But unfortunately this is not a Watermill problem; it's not an investment problem. This is the market for housing - it's just in a bad place."
But state officials say the company flagrantly violated the law. New Hampshire's attorney general is seeking a court order to freeze the assets of Customized Structures so the proceeds can be distributed to workers as severance pay. The federal law also levies up to $30,000 in civil penalties against a company in violation of the act.
"The ethical thing, the moral thing, and the legal thing would have been for Watermill to follow the federal act," said Lynch, a Democrat who headed a consulting firm and was chief executive of a national furniture company prior to his election in 2004. "We should all be outraged by this type of corporate behavior."
Lynch visited the company's headquarters Friday to speak to the workers and advise of them of available state aid.
Watermill listed the plant's closure date as Dec. 25 in documents filed with state, the governor said. Watermill officials said on Saturday that most workers had their last work day Friday. Some employees will end work on Dec. 28 and a few may work into January.
For Claremont, the loss of Customized Structures hits hard. The city, a mill hub that spearheaded a landmark lawsuit that a decade ago successfully changed the funding of schools in poor towns, had counted the company as one of its prime employers.
"This is a setback," said Guy Santagate, the city manager. "There is no denying that."
He said that had the company provided at least 60 days severance or warning, the city would have been able to absorb more of the laid-off workers. A water bottling plant is opening in the fall and will provide 50 jobs, with possibly 50 more by 2009, and several long-shuttered mills are poised to reopen next year as homes to a restaurant, The Common Man, and a computer networking and consulting company, Santagate said.
Since Customized Structure's founding in 1985, the city has provided it with aid in the hope of keeping it in Claremont. Even after Watermill acquired it in 2003, the city gave the company low-interest loans of $500,000, which the the firm repaid, Santagate said. The company also received a $175,000 job creation grant from the state in 2005.
But Watermill officials said the state has not done enough to assist the company. Watermill officials said Customized Structures will only be resurrected if the state agrees to match any investment Watermill makes in the company, dollar for dollar. "If the governor wants to save jobs, we are happy to work cooperatively," Eburne said.
Lynch responded, "The only entity with a responsibility here is Watermill. The law places the responsibility with Watermill. The issue here is making sure the workers get the severance they are entitled to. They haven't, and they are suffering."
On Friday, few workers held out hope of a reprieve for Customized Structures. As they said their goodbyes and wished one another good luck, many faulted Watermill for the bitter surprise of the layoffs because they said the firm failed to communicate its economic woes to them. "People had no idea it was this bad," said Ralph Farnsworth, 46, a father of four, whose 23-year-old son is serving in Iraq. "It's a letdown because we thought everything was going to be all right."
Around town this weekend the mood was discernibly bleak. Chris Bryant, 37, a painter said that he has almost taken a job with Customized Structures three months ago. "Boy, am I glad I didn't," he said.
"It's just another blow to another struggling town," said Lynn Frank, 40, an electrician.
