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January 15, 2008
orth Liberty-based Victor Plastics Inc. announced a bankruptcy filing and plans to begin laying off its 420 employees because of market conditions.
The company announced its plans Tuesday, but said it expects limited production to continue through the first week of May.
"Our firm has worked strenuously to avoid bankruptcy," Victor Plastics CEO Mike Tryon said in a prepared statement. "However due to industry outsourcing to overseas competitors, intense market competition, loss of key customers, and increasing costs of raw materials (particularly resin) we were unable to operate profitably, so we were forced to make some tough management decisions."
Tryon said employees will be laid off gradually as its production slows down. He said Victor Plastics is working with local government agencies to assist employees interested in other job opportunities, and will work with its customers to meet their immediate production needs.
Victor Plastics sold its Kalona Plastics operation last year to Engineered Plastics Components. That move followed an earlier closing announcement for the Kalona operation in response to a decision to terminate a supplier contract with Whirlpool Corp.
Resin is created from petroleum, and prices have risen steeply in the past year with the price of oil.
"We understand how tough this is on our employees, their families, and our customers," Tryon said. "We have a plan in place to ensure and orderly wind-down."
The bankruptcy filing was made in the U.S. Bankruptcy Court in Minnesota by Victor's parent company, VMI Acquisitions.
Victor Plastics was founded in 1983 in Victor and later expanded with plants in Kalona and Marion. The Marion operation was moved to North Liberty in 1995, and the company moved its headquarters to North Liberty in 2006. The company also acquired an operation in Flora, Miss., in 2006.
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