Even plastic wrap broke down in this recession.
Global plastics experts Gloucester Engineering, the manufacturer of machines that keep the world in shrink wrap, is bouncing back, its executives say, from a downturn that dried up orders and cost it 25 percent of its workforce in the past year.
The company's orders have doubled this year compared with a bleak 2008, Gloucester Engineering Chairman John Sharood said, when orders for their big machines virtually stopped amid the credit crunch.
"In 2008, we were in the middle of the deepest recession, a rough time for the industry and Gloucester (Engineering)," Sharood said. "For six months we were having a tough time. But in March, the heavy investment we have been making started to pay off."
The collapse in the plastic capital equipment market tracks with other tales of the downturn: customers of the company's machines stopped buying in the fall of 2008 after bank and Wall Street failures froze lending.
But starting in March of this year, Sharood said, the orders started picking up again, especially for a new machine that cuts in half the time it takes to turn out a roll of plastic wrap.
Named the WOW Winder for the reaction company marketers say comes from customers when they see how fast it turns out rolls of plastic, the machine is a giant combination of rollers, robots and shiny metal arms.
Company Vice Chairman Dick Murphy said Tuesday the machine can produce 3,000 feet a minute of plastic wrap, or one roll every five seconds.
The latest WOW winder is heading for a customer in Oklahoma, but Gloucester Engineering has sent even larger machines around the world — like a machine that went to Peru that was too heavy to truck over the A. Piatt Andrew Bridge.
But that was before the economy cratered.
All told, the company lost between 50 and 60 workers from 2008 to 2009, Sharood said, bringing its total workforce down to around 200 employees. In 2006, the work force was estimated at around 400 employees and in late 2007 at 280.
That total still makes the company one of the leading private employers on Cape Ann behind neighboring manufacturer Varian Semiconductor Equipment Associates.
Founded on Sargent Street in 1961 to take advantage of the emerging market for plastic trash bags, the company built its Blackburn Industrial Park plant in 1970 and, with Varian, has been the foundation of the city's industrial base.
Varian was also hit hard by the recession and layoffs and has just recently nudged into profitability after a year of losses.
Even with orders up, Gloucester Engineering still faces cash flow issues, Sharood said, because the typical plastic machine takes around six months to build and the company doesn't get paid until they deliver the finished product. That problem was exacerbated when several customers who had ordered machines went bankrupt before delivery.
As Gloucester Engineering heads into 2010, one of the goals is to reduce the time it takes from an order until a machine, which typically cost between $1 million and $5 million, is delivered.
Sharood and Murphy were among a group of Maine-based investors who bought the company from a German conglomerate in 2007, less than a year before the recession took hold.
Briefly public in the 1970s, the company is now privately held and does not report earnings or make revenue forecasts, but Sharood yesterday was generally optimistic.
"As our volume increases, we hope to bring back workers and recover employment levels," Sharood said. "Next quarter is going to be a good quarter."
Patrick Anderson can be reached at 978-283-7000, x3455, or via e-mail at panderson@gloucestertimes.com
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