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In Wake of Pandemic, Whelen Engineering Reduces Chester Workforce by 98
On July 10, Whelen Engineering, a manufacturer of emergency warning systems, announced a round of layoffs at its facilities in Chester, Connecticut and Charlestown, New Hampshire, due to the impact of COVID-19 on business operations.
In a press release on this date, Whelen President and CEO George W. Whelen V pointed to the “significant financial constraints” that COVID had placed on the organization, leading to “a reduction in our product demand.”
Whelen worked to alleviate the financial strain by adopting several cost cutting measures since the start of May. This meant rescheduling shift patterns, canceling contracts with temporary workers, implementing a freeze on merit increases, and implementing a short production furlough, according to the organization.
However, “to preserve our ability to rebuild when this recession is over, we have been forced to make the difficult but unavoidable decision to reduce our workforce,” said Whelen.
The decision affected 98 employees in Connecticut and 148 employees in New Hampshire, of a total current workforce of 1,474. The job losses were across departments, including production, engineering, finance and sales.
In addition to severance pay, the company plans to help affected employees with the services of the international career transition and coaching firm Lee Hecht Harrison (LHH). LHH has locations in Hartford and Stamford.
In communications to the press on July 10, First Selectman Lauren Gister expressed dismay regarding Whelen’s announcement.
“We are deeply concerned about the impact that this action will have on the affected employees of Whelen, a good many of whom are our friends and neighbors,” said Gister. “The Town of Chester will be here to support them in any and every way that we can.”
Topping the town’s combined list of the highest taxpayers at $10,098,690 in 2019, Whelen Engineering is inarguably important to the town’s economy.
“The effect on town finances has yet to be determined. There are many variables involved in that analysis, including some that are dependent upon Whelen’s future actions, and I do not expect that we will know the answer to this question for some time,” said Gister.
Whelen said the layoffs will help lay “the foundation for a reconstructive phase, enabling them to accelerate the transformation of their business,” according to the July 10 press release.
In an email with the Courier on July 13, the Whelen communications team indicated its core focus areas for its “business transformation. In addition to our market leading safety and warning solutions, we will continue to invest in next-generation intelligent control systems for emergency vehicles, Internet-enabled fleet management solutions, and innovative light- and sound-based devices.
“We are also focused on continuing our international growth, where our American innovation and ingenuity can help keep first responders safe around the globe,” the company stated.
Adapting to the Unknown
Whelen Engineering isn’t the only company in Connecticut seeking to better understand how to operate as transmission of COVID slows in Connecticut.
“Because I understand a little bit of the market that Whelen sells to, it makes sense that they are struggling to determine the right way to handle this unprecedented situation that we all find ourselves in,” said Gister by email on July 13. “They are not the first, nor will they be the last to try to re-adjust a business to adapt and be resilient in a crisis that has no definitive end date.”
Eric Brown, the vice president for manufacturing policy and outreach at the Connecticut Business and Industry Association (CBIA), said, “Most companies, they are just now starting to look up from ‘How do I get through this week, or next week?’ to…post COVID, ‘What do we need to do to get back on our feet?’
“I don’t know the specifics of Whelen, but there is market disruption and orders are down, so…in their case they made a judgment that for them to get back to being a healthy, strong company going forward, that they need to take that short term measure,” he added.
Asked what the impact of COVID-19 could be on the overall manufacturing industry in Connecticut, Brown said, “I have anecdotal conversations that don’t indicate anything that I would see as a trend toward layoffs. The one concern that I would have is that some of the programs that have been out there to help, particularly small businesses, to keep going, particularly the Paycheck Protection Program (PPP), are winding down.”
PPP is a forgivable loan program offered through the U.S. Small Business Administration used to cover payroll and certain other expenses. It is just one of several options providing a form of financial relief for businesses and industries during the pandemic.
Overall, though, Brown said the manufacturing industry in Connecticut, of which defense is the largest proponent, remains strong.
“If you look at the defense industry, generally there are disruptions here, but the overall demand for defense industry products is still strong and expected to stay strong,” said Brown.
Connecticut manufacturers are responsible for $14.4 billion in defense contracts, directly supporting 156,000 employees with an annual payroll of $13.6 billion, according to the State Department of Economic and Community Development. Every dollar spent on manufacturing adds $1.35 to the state’s total economic activity.
“I think companies are just trying to get through this very temporary disruption and working with supply chains and so forth to get through this most difficult time, there is every reason to be optimistic that once we work our way through this, there will still be strong economic opportunity in terms of manufacturing and job opportunities, even though some are suffering because of drops in demand,” said Brown.