Semitool prepares for worst; hopes for the best
By this time next week, Semitool Inc. officials will begin crunching numbers to determine if potential layoffs announced earlier this month will happen.
"We don't have any firm numbers nor have we identified any particular employees who would be subject to layoffs at this time," Semitool's general counsel Richard Hegger said Tuesday.
"We're just trying to stay prepared for whatever business levels are going to be, and that will dictate how that will take place."
On March 9 the Kalispell-based company notified all employees at its Kalispell, Birch Grove Road and Libby plants that the company could institute layoffs as early as May 8.
Flathead County commissioners and state employment officials in Helena also received the notice as called for under the Worker Adjustment and Retraining Notification Act.
The federal law requires 60 days' advance notice when an employer anticipates laying off a third or more of its work force, or if the potential layoffs affect 500 or more people. It also applies to plant closings.
Semitool currently employs 520 people at the three facilities in Western Montana, and 880 worldwide. At full employment, Hegger said, Semitool's Montana employees numbered in the high 800s.
The March 9 notice came on the heels of the Nov. 10, 2008, layoffs of about 100 workers in Kalispell and Libby, and the Jan. 8 layoffs of 200 more who had just returned from a three-week plant shutdown.
"Around 75 percent of our business is export, and there has been a dramatic decrease in the semiconductor industry worldwide," Hegger explained. Inventories exceed demand right now, so companies have cut back on buying the equipment Semitool produces.
Semitool, with global headquarters in Kalispell, manufactures wafer processing equipment for the semiconductor industry.
But "an oversupply at some point always becomes an undersupply," Hegger said. "We're trying to stay responsive. We have some technologies which should help us to get some of this business when it reemerges.
"The technologies will drive a lot of our recovery, and I think we're well-poised to participate in the recovery."
He said the industry's problem right now is "visibility" - the ability to project industry trends.
"It's only because of the lack of visibility that we issue this notice," he said. "If we had more visibility we would be taking actions.
"The problem is you see this every day when you turn on the news. There's no visibility as to how long this downturn will last or how deep it will go."
Monday's 6.8 percent rebound in the Dow Jones Industrial Index, he said, pointed up that the semiconductor industry is subject to the ups and downs of the market.
"We still are confident that we have the ability to respond to the market," Hegger said. But "like every company in the United States now, we are having to adjust to" the downturn.
Semitool needs to be "in front of the issues," he said, to stay strong enough to grow when the economy recovers.
The company's fiscal quarter ends March 31.
"We will have a better idea then what our bookings are. That translates to the value of our equipment and the manufacturing as we go forward. We will be making our decisions within a couple weeks of that," Hegger said.
"We're hoping there won't be any [layoffs]. We're holding out the possibility that there won't be. We just need to be prepared."
Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com