Vermont Tubbs acquired
By Jeff Linville -- Furniture Today, October 6, 2003
Brandon, Vt. — Solid-wood case goods manufacturer Vermont Tubbs has found a buyer and will stay in business.
Vermont Quality Wood Products, led by a group of Vermont businessmen, closed a deal for the company's assets on Sept. 27, three days before the plant was due to shut down.
The lead investor is Jon McNeill, founder and chief executive officer of two insurance-related companies, First Notice Systems and Sterling Collision Centers. Other investors include Bill Meub, principal lawyer at Meub Associates, and his son, Conrad.
Named as the new president of Vermont Tubbs was Fred Musone, former president of airbag manufacturer Morton International and former chief operating officer of Federal Mogul.
"Vermont Tubbs's proud history began 163 years ago," said McNeill. "This company has just needed financial stability — it's a great brand, a vibrant team of employees and has an amazingly strong customer base."
"It is our aim to preserve this company, save jobs and provide a strong future for our people," said Musone.
The downturn in the economy that began three years ago has been especially difficult for Vermont Tubbs. In 2000, the company had 255 employees and sales of $16 million. But foreign competition and lagging sales forced the company to lay off workers. By 2002, sales had dipped to $14.7 million and then-owner Bill Carris hired industry veteran Lee Houston to turn the company around.
"When I arrived, I found a company that was losing money," said Houston, who has since left the company. "I also found an outstanding group of employees who made a superior product. In a year, those employees have revitalized the company. Now a group of capable investors also has seen Tubbs's potential."
"Lee Houston did a remarkable job of improving the operations at Vermont Tubbs," said McNeill. But despite the improvements in efficiency, sales continued to decline and more workers were laid off. Employment had dropped to 142 by this spring, and by the Sept. 27 sale there were 107 workers.
The banking company holding the Vermont Tubbs debt gave Carris the choice this July of either finding a buyer within 60 days or closing it and selling its assets.
"A strong team of people came together to make this purchase happen, but it would not have happened without the help from many people who are committed to saving jobs and helping Vermonters," said McNeill. "Gov. Jim Douglas and his economic development team really got behind this effort to assist us with saving these jobs."
With only three days before the plant faced closure, the deal finally was made when the Rural Development Authority agreed to back 90% of an initial $2 million loan, with the Vermont Economic Development Authority providing another 5% of the collateral, according to McNeill.
The investors purchased all the Vermont Tubbs assets except for the 132,000-square-foot factory in the industrial park here. McNeill said Vermont Quality Wood Products is leasing the building until it can be purchased, which should be by mid-November.
A day after the purchase, McNeill announced the company was laying off 27 employees, lowering the workforce to 80. McNeill said he hopes to hire back some of these workers soon, but right now the company doesn't have the orders to support 100 workers.
He added that 80 employees probably is too many at this point, but he wants to be ready to fill new orders now that the ownership question has been settled.
