Spring Air still in limbo
Former licensee reopens Mass. factory
By David Perry -- Furniture Today, May 18, 2009
Tampa, Fla. — The fate of Spring Air, once one of bedding's biggest brands, remained in limbo last week as the mattress industry continued buzzing about the stunning shutdown of the company earlier this month.
A longtime Spring Air licensee, Ed Bates, said he had signed a deal to repurchase the Spring Air business in Chelsea, Mass., that he sold in 2007 for $18.5 million. Bates told Furniture/Today he had reopened the company and hired about 80 workers to run the factory.
"This is the time for entrepreneurs to invest in this country and get people back to work," Bates said.
The 77,000-square-foot Chelsea plant and eight other corporate-owned Spring Air plants closed in early May when a last-minute deal to sell Spring Air fell through. With the exception of the Chelsea plant, the other corporate plants remain closed.
Meanwhile, Spring Air's three U.S. and two Canadian licensees have continued to operate.
Industry sources say Bates could play a larger role in the future of Spring Air than just as the owner and operator of the Chelsea factory that he originally founded in 1972. But Bates, who became a Spring Air licensee in the 1980s, had no comment last week about any additional plans he may have for Spring Air.
Officials with American Capital, Spring Air's owner, had no comment on the closing of Spring Air or their plans for the producer, which once ranked as the industry's fourth-largest bedding maker but had slipped to No. 6 in recent years.
In its first-quarter financial report, publicly held American Capital revealed that its investment in Spring Air has been a big loser for the company. In its 10Q filing, the company said it had valued the Spring Air investment at $18.4 million at the end of the first quarter, while the cost of the investment was $206.1 million.
In another development, a former employee of the shuttered Spring Air mattress factory in Tampa filed a lawsuit in U.S. District Court accusing the bedding producer of violating federal law by failing to provide 60 days' notice of the factory shutdown. The former employee, Jared Azzata, claims the company violated the Worker Adjustment and Retraining Notification Act and should pay employees 60 days' worth of wages and benefits.
Azzata is seeking to have the case certified as a class action suit, which would allow other former employees at the shuttered factories to join him as plaintiffs.
Meanwhile, there also was much talk in the industry about a letter sent by Spring Air to the former employees telling them that their health insurance and benefits had been cut off as of the end of April. Several former Spring Air employees expressed their disgust at that treatment in postings to a Furniture/Today blog on the subject.
Former Spring Air CEO Steve Cumbow also told Furniture/Today that he condemns the actions described in the letter, and said he had left the company two days before it was sent. "I did not support that letter," he said. "I would never support a letter like that. In my view, we had an obligation to do what we could for employees who worked so hard for the company."
Of the actions spelled out in the letter, he said: "I don't treat people that way in my personal life. I don't treat people that way in my professional life."
Cumbow said he left Spring Air on May 5, the day he announced to employees at the company's Tampa headquarters that their jobs would end at the end of that day. The letter, which Cumbow said he believed was written by American Capital, was sent on May 7.
Officials at American Capital had no comment on the details surrounding the letter.
| Acknowledgements | ||
| Business Editor Larry Thomas contributed to this story. | ||
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Former Spring Air employee sues company
May 12, 2009 -
UPDATE: Boston-area Spring Air plant reopens
May 12, 2009
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