The recession may be easing, but the brunt of the economic downturn still hit two Southeast Nebraska towns on Wednesday.

  • In Auburn, Armstrong World Industries announced it will close its cabinet plant for good by Dec. 18, costing the jobs of 171 people. Armstrong is the Nemaha County community's third-largest employer.
  • At Louisville, Ash Grove Cement Co. said it will lay off 87 of its 138 employees four days before Christmas. The company called the layoffs were temporary, but it offered no projections of when workers might be recalled.

Last week, local and state officials gathered as the company celebrated 80 years in Nebraska by dedicating a new 14,000-square-foot office building. The $3.6 million building includes offices, an employee lunchroom, lockers and a conference room.

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All 171 employees of the Armstrong plant in Auburn will be eligible for unemployment, and Nebraska's Workforce Development rapid response team was notified to help with placement services, according to an e-mail from Beth A. Riley, a vice president at Armstrong's headquarters in Lancaster, Pa.

Riley's e-mail called the decision "regrettable and a last resort."

The closing was prompted by "the sustained downtown in the economy, particularly the housing markets."

The Auburn plant opened in 1962 and became part of Armstrong in 1998.

The company will consolidate cabinet operations at its plant in Thompsontown, Pa.; the facility there is larger and can be expanded to absorb the volume from Auburn, Riley said.

"This decision is no reflection on the Auburn Plant employees who have been key contributors to the success of Armstrong Cabinet Products," Riley's e-mail said.

Earlier this year, the company idled plants in Mississippi and Alabama, according to The Associated Press.

Auburn Mayor Bob Engles said city officials and the Auburn Development Council started the process to fill the upcoming void in the manufacturing sector, radio station KNCY reported. State officials pledged their support to help employees in job transition and to recruit new manufacturers, Engles said.

Engles noted Nemaha County will still have well over 1,000 off-farm, nonretail jobs that will help in the transition until another major employer comes to the area.

In July, Armstrong nationally reported second-quarter net sales of $705.7 million, down nearly 24 percent from $926.8 million in the same period for 2008.

When it reported its fourth-quarter and full-year 2008 results in February, Armstrong said it was planning to cut its global workforce by 5 to 10 percent this year.

Just a few years ago, the company's future in Auburn seemed to be bright. In 2007, it filed an application for state tax incentives pledging to invest $10 million and to hire at least 100 people as part of an expansion.

At one time, more than 250 people worked at the plant.

The housing downtown also has affected at least three Lincoln cabinet makers.

Eno Cabinet Works, a custom cabinet maker that got its start in Lincoln in 1936, http://www.journalstar.com/business/article_b4fd4c4c-9f1c-11de-83f7-001cc4c03286.html"> shut its doors Aug. 28, and two other cabinet makers laid off or furloughed employees in recent weeks.

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The Ash Grove plant at Louisville is one of nine Ash Grove plants in the Midwest and West that will suspend production because of economic conditions in the cement industry.

Ash Grove is the sixth largest cement manufacturer in the United States.

Product shipments to current and prospective customers will not be affected, the company said, as Ash Grove will draw from inventories built over the past several months.

Several Louisville residents contacted Wednesday said they had not heard about the layoffs.

Jeff Power, who owns Jeff's Jack & Jill Grocery, said the layoffs will affect not only Louisville but other towns that have residents who work at the plant.

"I don't think it's going to be a huge drastic impact, but it may affect us a little bit," Power said.

When it announced http://www.journalstar.com/business/article_31bb0132-a6e5-11de-893e-001cc4c002e0.html"> last week's dedication of its new office building, Ash Grove said the company's annual economic impact in Nebraska is more than $70 million and that it generates nearly 20 percent of the taxes that support the Louisville school district.

Ash Grove operates the only cement plant in Nebraska and distributes its product in Nebraska, Iowa, South Dakota and Kansas.

"Our employees are an integral part of the Ash Grove family, and we are hopeful that the economy in our marketing area will recover quickly so production at the Louisville plant can get back to more reasonable levels," Louisville Plant Manager Dan Peters said in a news release Wednesday.

Peters confirmed the layoffs but referred all questions to a corporate office in Overland Park, Kan.

Production at Ash Grove plants is expected to resume on a rolling start-up basis as sales demand dictates, the company said.

"The economic downturn affecting the entire cement industry is the most severe that Ash Grove has experienced in our 127-year history," said spokeswoman Jacqueline Clark.

The Portland Cement Association, the industry's trade association, projected U.S. cement consumption would drop by 22 percent during 2009, preceded by a nearly 16 percent decrease in 2008.

The most recent forecasts by the association project declines in demand could continue through late this year, with a modest recovery expected late next year or early 2011.

Ash Grove said it continued operations during the past year while many competitors announced shutdowns and layoffs.

According to information from the Portland Cement Association, at least 15 cement plants in the U.S. have announced temporary or permanent shutdowns, and more are anticipated during 2010.

Reach Algis J. Laukaitis at 473-7243 or alaukaitis@journalstar.com. Reach Matt Olberding at 473-2647 or molberding@journalstar.com. The Associated Press contributed to this story.

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