Riverdale Mills reduces workforce 25% due to tariffsJanuary 02, 2019
Over the course of the last nine months, Northbridge wire mesh manufacturer Riverdale Mills has reduced its workforce by 25 percent via attrition, part of a strategic plan in response to the federal tariffs on steel imports.
Riverdale Mills makes coated wire for lobster and other seafood traps and has been hit hard by the 25-percent tariff on steel imports from Canada, Mexico and the European Union. CEO James Knott Jr. told The Wall Street Journal the company's steel prices have doubled as it is forced to shell out cash for imported steel because U.S. suppliers can't meet the quality.
"My foreign competitors are buying steel at half the price I'm paying, and some of them face no tariffs when [exporting] to the U.S," he told The Wall Street Journal.
In a follow-up statement to WBJ, Riverdale spokeswoman Jane Lanzillo said the overall headcount at the company has been reduced to 150 from 200, as the company has postponed hiring for non-critical jobs. Riverdale, though, is still hiring for positions in its manufacturing, engineering and accounting departments.
"During Riverdale Mills' 38-year history, we have experienced and successfully navigated through uncertain and volatile business environments," Knott said in a statement to WBJ. "We have a talented pool of employees, exceptional and unique products and a loyal customer base. I am confident our business will endure."
To pick up cost savings elsewhere, Riverdale invested heavily in energy generation and conservation programs in 2017 and 2018, to the point where it generates almost all of its own electricity, Lanzillo said.
The company has applied for federal exemptions to the tariffs, but the amount awarded thus far only covers about 3 percent of its steel purchases, Lanzillo said.
In June, the company said it was scaling back its operations after President Donald Trump imposed a 25-percent tariff on steel imports.
Three railcards of steel sitting in its yard at the time were burdened with $60,000 in tariffs alone.
"This type of additional and ongoing production cost increase, along with the current high price of domestic steel, puts the company in jeopardy in ways not anticipated last year," Knott told WBJ at the time.
CORRECTION: An earlier version of this story said the company laid off 50 workers. Riverdale Mills made cuts through attrition and did not lay off any workers.