CLAY REYNOLDS

    Laurens County's largest private employer laid off more than 350 workers Monday as it announced a decision to shut down operations at the largest of its manufacturing facilities in Dublin just more than a year after it opened. 
    Valmiera Glass Group, in a move that came with no warning for its employees and local officials, moved to close its phase II plant, the newest of two local factories, citing a range of financial difficulties that have tied up the location and corporation as a whole. The company filed for Chapter 11 bankruptcy protection in Georgia's Northern District, and for legal protection proceedings – the Latvian equivalent – in a Valmiera district court on Monday. 
    A statement released by Valmiera Human Resources Manager Crystal Wilson credited "huge unexpected losses (that) occurred during the extended start-up phase" and failed efforts to sell the plant or locate an investor to restore its financial stability as reasoning for the decision to cut its losses. The release added that operations were halted at 2:30 p.m. Monday, and that more than 350 were laid off.  
    Wilson confirmed that the company's phase I operation, its original factory which weaves its glass fiber into fabrics next door, will remain in business. But as of Tuesday, little else is clear about the future of Valmiera Glass or its Dublin presence, which represents the whole of its footprint in the United States. 
    Local officials contacted Tuesday said they remained largely in the dark on details of the facility's unexpected shutdown, after being blindsided by the news Monday afternoon. 
    "We really don't have any new information right now," Dublin-Laurens County Development Authority President Ryan Waldrep said Tuesday. "We're hoping to have some soon." 
    Corporate officials pointed to a number of issues with the phase II facility, ranging from finances to labor-acquisition, that have made the entirety of Valmiera's stateside venture unprofitable since the start of the expansion in 2017. 
    "Despite multiple innovative approaches by management at our U.S.-based facility, it has continued consuming cash from other parts of the Company," Valmiera Glass Group board chairman Stefan Jugel said in a release. "At the same time our Latvian and UK operations have retained healthy levels of cash generation and profitability. The time has come to re-focus our resources and we have therefore requested a formal way to engage with all of our creditors."
    The company filed for chapter 11 protection in U.S. Bankruptcy Court of the Northern District of Georgia at 8 p.m. Monday. A copy of the petition obtained by The Courier Herald listed upwards of $10 million in debts to creditors including financial institutions, technology and material suppliers and KBD, the construction firm which built the phase II facility. It also itemized $271,644.08 owed to the City of Dublin and $1.2 million to the DLCDA. 
    "We never reached our production level in the U.S.," Jugel told investors during a webinar Monday. "We are, at the moment, at 50-55 percent of production output, and also then, we are at 55 percent of the sales, but at 100 percent of the cost. That is why we are not at the moment able to create positive cash flow." 
    The DLCDA received word of the planned closure in a letter Monday afternoon. 
    "It was certainly unexpected," Waldrep said. 
    The layoffs leave upwards of 300 employees in search of work. 
    Waldrep said the county's workforce development board, which worked with Valmiera to coordinate training programs for its job openings at both facilities, will be reopening its career center later this week to assist those affected by the layoffs with job placement, continuing education and computer resources. Former Valmiera employees are encouraged to visit worksourceheartofgeorgia.org for more information. 
    Valmiera Glass, which is publicly traded but controlled by majority shareholder Jurgen Preiss-Daimler, originally expanded to the U.S. in 2014, breaking ground on its initial Dublin location – later known as phase I – in July of 2014. The investment represented $20 million and 150 jobs. The company produces a variety of glass fiber products, which are sold in various consistencies as a continuous spool or woven into fabrics to customers in the aerospace, automotive, construction, oil/gas, appliance and tire industries. 
    The original facility, which measures 80,000 square feet, was built with designs on elevating production output to buyers in the Western hemisphere, working at first with materials originating with the company's existing plants in Europe. 
    The phase II expansion, part of original plans for the company's first-ever stateside venture, constructed a companion factory to melt and process the bulk glass. The project, whose cost was estimated at $90 million, promised 425 additional jobs. 
    Dublin won the intense bidding contest for the second facility, with its footprint of 250,000 square feet that would stretch the Valmiera campus on the Paulk industrial site off of Ga. 257 to 90 acres. Laurens County's bid, which beat out those in two other southeast states, provided incentives including a 25-year tax exempt status and a county commitment to cover the cost of site-preparation, provide a $1 million cash grant and waive administrative fees associated with construction. 
    Completed in early 2018, the plant boasted millions of dollars in technology associated with a natural gas-fed furnace and production line football fields in length and width comprised of equipment for refining and spinning the molten glass. The project was billed as a decades-long investment, considering the great difficulty and cost associated with shutting down the furnace intended to melt glass 24 hours a day year-round, ideally shutting down only for routine repairs at 10-year increments. 
    But the process of launching the new operation was anything but glassy-smooth. Construction and supply delays pushed completion of the furnace and its connected machinery past Christmas of 2017, and startup into early 2018. 
    The company also experienced trouble recruiting and retaining adequate employees to hold down its top-tier of skilled positions, despite a program that trained local recruits at their own expense through classroom work at Oconee Fall-Line Technical College and a multi-week residency at the company's headquarters in Valmiera. 
    While the company succeeded in filling its jobs that required minimal training, receiving over 1,000 applications for a batch of 200 openings just before the phase II scale-up in late 2017, it failed to build sufficient numbers in its most involved roles to achieve production goals, even with the help of many employees brought over from Europe to help in the startup.
    "One of our biggest challenges in the U.S. was finding a stable workforce, creating a stable workforce and finding skilled people in the U.S., and we still facing this challenges on a daily basis in production," he said. "We haven't been able, so far, to utilize the investment 100 percent, even if customers are waiting and supporting us and even if the market is waiting for our product."  
    The new plant also came under fire from regulatory agencies after environmental and workplace safety violations. 
    The company was the subject of five separate O.S.H.A inspection cases dating to 2015, with three since January of 2018 involving construction and operations of the phase II facility.  
    One of the latest complaints stems from a March incident that cost an employee his arm. The 21-year-old was airlifted to a Macon medical center after the limb was trapped inside a fiberglass shredder on March 7. 
    Local firefighters also responded to an incident at the facility last December when a furnace malfunction caused an internal explosion. No one was hurt. 
    Valmiera was also the target of an enforcement order issued this January by the Georgia Environmental Protection Division, which cited excess emissions of both particulate matter and nitrogen oxides from its glass melting furnace in violation of the Air Quality Act. 
    These concerns came on top of numerous employee complaints of late paychecks, strenuous hours and poor working conditions. 
    Jugel, however, stressed that labor was not the only issue that prevented the newest U.S. venture from succeeding. 
    "It was several things, not just workforce," he said. "They did a good job. For some of them, the company became a family as well. I wouldn't blame our workforce, but for sure we have problems. We have 24 hour, 365 days production. We need the minimum workforce to utilize our capacity and we never reached this level." 
    Monday's decision was triggered when corporate bank Landesbank Baden-Württemberg called a loan of just over $3 million. Company officials were unable to cover the payment, hampered by banking restrictions and declining to take cash out of its profitable operations in Latvia and the UK to channel to the flailing U.S. venture. The absence of what he called a short-term solution gave the board no more realistic option. 
    "We decided, after discussion of several options and after legal consultancy with all legal advisors, to start a legal protection process, which gives us the possibility for the next eight weeks to negotiate, find a settlement and also find a common sense with our creditors and other stakeholders of the company," Jugel said. "The target of the management is to cooperate for the next two months with the creditors to find a legal protection proceeding plan, and ensure sustainable continuation of our business." 
    Latvia's LPP process gives the company through Aug. 19 to present a plan for restructuring and payment of its creditors. Jugel said the legal-protection status did not signal the company's insolvency, and described "stable business" in both its European locations. 
    "Those companies are fulfilling their business plans and generating sufficient cash flow and a good net profit," he said. "We were facing several challenges in the U.S., but I still can confirm the U.S. is a good market for our product. We have higher prices, we have bigger customers, we have high demand, we have a unique selling point for some of our products in the U.S. the U.S. is still a good market for us." 
    Efforts to find an external buyer for the facility, after talks to that end fell through prior to Monday, have been scrapped for the time being. 
    "At the moment, I would say it is project, failed," Jugel said. 
    He added that hope remains strong within the company that what remains of its stateside enterprise will recover and succeed in the future. 
    "We all supported this investment in the U.S.," Jugel said. "For us, it was a good step, and it still is a good step, to join this market to increase our business. And sure, if you go to a different country, different society, different people, a lot of things can go wrong. We still are convinced that the factory is at the right place at the right time, in the right market with the right products, but sometimes, small things going wrong can have a high impact on the overall business."