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Darex Corp. forced to trim staff

ASHLAND -- Darex Corporation, a company lauded for its great work environment, is cutting staff by 12 percent, it announced Tuesday.

In all, 13 permanent employees were cut from the payroll this week.

Management let several other non-permanent employees go last month, said one former employee.

We've been experiencing a slowdown and trying to figure out what to do, said Gary Varney, Darex industrial division president. This was the last resort.

The reduction leaves about 100 employees working at Darex. Varney said international business pressures caused the cuts.

Darex Professional Tool Corp., the company launched to produce and sell the Drill Doctor -- a drill-bit sharpener -- and Darex Industrial Corp. together earned an estimated $20 million in sales in 1998.

The $20 million represented a 35 percent increase from 1997 and came on the heels of 50 percent growth the year before.

Varney said profits, though, are way down this year.

Darex was ranked the highest of six Rogue Valley companies named in Oregon Business Magazine's 1999 list of the best 100 companies to work for in Oregon.

In its selection, the magazine cited the company's team decision-making approach, productivity bonuses and sabbaticals, profit-sharing and job training.

This was an excruciating decision for us to make, Varney said.

Darex is known for its loyal employees and it was very difficult to let people go.

Varney said a number of factors contributed to the need to reduce staff. One was the loss of 400,000 U. S. manufacturing jobs in 1998.

We sell to manufacturers, he noted. Our major market is manufacturing, so if manufacturing is down, they aren't ordering.

He also said there has been a significant loss of manufacturing exports and a dramatic increase in cheaper imports, especially from Asia.

Darex does about half of its sales overseas and has sales agents in 32 countries.

If I thought this was a temporary situation we would have tightened our belts even further and hung on, Varney said. Unfortunately, we have no reason to believe that the economic factors creating the decline will change dramatically in the next 12 to 15 months.

He said, though, the company provided severance and out-placement packages to support the employees who were let go. The cuts of permanent employees occurred in the Darex Industrial Corp. and not its spin-off Darex Professional Tool Corp.