Norwalk suspends operations temporarily
by: Liz Engel, Herald-Citizen Staff
Norwalk Furniture has had its Tennessee operations stopped indefinitely as part of suspensions that also took place last week at plants in Ohio and Mississippi.
Norwalk, which now owns a saw mill in Byrdstown, purchased from Mullins Lumber Company and lumber operations in Jamestown and Dickson County, said that those operations have been shut down, but that the situation is expected to be temporary. The suspensions are a result of reported problems its parent company is experiencing with its lender.
According to the Associated Press, the company's bank, Dallas-based Comerica, told Norwalk Furniture it was cutting off its credit and that it had to pay its loan immediately.
The furniture maker now has an $11 million debt, according to the AP.
Locally, the company now employs about 125 people between its facilities and its administrative offices, the only part of the business still left in Cookeville, which will be moved to Livingston at a yet-to-be-determined date.
Work has already been suspended at all its Tennessee facilities for about a week, and those employees, including the 500 in Ohio and 300 in Fulton, Miss., will likely not be back at work Monday.
"Norwalk Furniture Corpora-tion, the parent company, has been under a lot of financial stress and their bank has basically made their lending requirements a lot more stringent," Allan Stingley, Norwalk's vice president of operations in Tennessee, said from Cookeville. "Norwalk hasn't been able to meet those requirements up there, and so the owners had temporarily decided to temporarily shut down all their operations, until they can get some sort of solution.
"It was a surprise to us, that's the best way to describe it," he said.
But Stingley doesn't expect the suspension to last much longer. He said several outside investors are actively negotiating with the bank to put additional equity into the company.
"We expect resolution to happen within another week or two weeks," he said. "We expect things to turn around very shortly, and we're actually going to do some very modest amounts of production in Jamestown this coming week."
Still the situation puts further stress on the company overall, especially in a time when the national economy outlook is so bleak.
"The owners, they appear to have a contract for sell their property in Cookeville to help support their financial restructuring," Stingley said. "The Norwalk Furniture financial stress is what's hurt us down here. The water kind of ran down the hill, and when they can't support or pay for the work we do for them, it chokes off our ability to operate successfully."
The company, late last year, had started the gradual process of cutting the last of 50 jobs in Cookeville as part of an effort to scale down its operations. Stingley had said then that the business' property on South Willow had become very valuable from a development standpoint. A developer from Atlanta was reported to have an option for purchase.
Norwalk first opened in Cookeville in the 1970s, and in 2005 employed as many as 120 people.