Crane Stationery says layoffs will begin in June after Paycheck Protection funds run out

After Crane Stationery announced it was "winding down operations," the historic paper manufacturer said Thursday it will carry on for the next eight weeks, with a $2 million loan from the federal Paycheck Protection Program. It will then begin laying off workers in June.

NORTH ADAMS — A day after telling employees it would "wind down operations" in the wake of "enormous losses" that left its business "unsustainable," Crane Stationery Co. tweaked its public message Thursday.

While the venerable company is down, it's not out.

It is carrying on, over the next eight weeks, with help from a federal loan worth more than $2 million. The company plans to use that money to pay wages, though dramatic declines in orders will mean workers in North Adams might not even have to report to shifts.

After the bulk of that Paycheck Protection Program funding runs out, Crane says, it will lay off 85 percent of its 229-person workforce in June.

Crane Stationery's owner then will attempt to carry on as a smaller enterprise in North Adams, its chief executive says, by improving its website and adjusting to changes in buying habits driven by the coronavirus as well as upheavals in how people communicate.

How Crane will do that, and with how many people, remains uncertain.

"We're not going to walk away from it," Thomas D. O'Connor Jr., CEO and board chairman of the company's parent firm, Mohawk Fine Papers, said of Crane Stationery.

Mohawk, located in Cohoes, N.Y., bought Crane Stationery in 2018 for an undisclosed price and since has invested more than $3 million in the firm, located at the Robert Hardman Industrial Park off Route 8 south of downtown.

The Eagle reported Thursday that Crane Stationery planned to close, based on wording in an email to workers — it said the firm would "wind down operations" — and on an interview with North Adams Mayor Thomas Bernard.

O'Connor said Thursday that Mohawk's legal advisers recommended use of the term "wind down" to make it clear to employees that the announcement would result in substantial job losses.

"I think that word created most of the confusion," O'Connor said.

While Crane Stationery plans to retain about three dozen employees after June 19, the date of the layoffs, the business remains severely threatened, O'Connor acknowledged in an interview Thursday.

As an illustration, O'Connor said Crane at one point forecast that sales this year of wedding invitations would bring in up to $9 million, before restrictions on large gatherings were put in place around the country.

"We're now forecasting zero," he said. Those sales represent as much as 40 percent of its yearly revenue.

"It just kind of wiped out the core of the business, but we weren't giving up," O'Connor said.

On Wednesday night, after speaking with a Crane employee, Bernard expressed concern about what he believed to be Crane's plan to close.

But, the next morning, the mayor said he heard otherwise from Crane officials. Bernard said he was reassured that Mohawk wants to attempt to save the business.

How the company will do that, the mayor said, remains unclear. Bernard said he doesn't know how many of the roughly 195 workers who face the loss of their jobs in June could be called back.

"They weren't able to tell me — and to a certain degree they don't know," Bernard said of company officials.

Laura J. Seele, Crane's senior marketing director, said the company does not have a timetable for calling workers back. It plans to cover health insurance premiums for affected employees through June 30.

Seele said that, in addition to 200 furloughs enacted after the business closed March 18, those who remained at work faced both hour and wage cuts. She said Crane plans to stay in its current space, which it owns, but noted that the company is evaluating the cost.

Bernard said that, given the scale of the layoffs coming in June, state agencies will need to help workers deal with the economic dislocation. He said that assistance is vital, even as the company attempts to hold on with a few dozen employees.

"It changes the nature of the response we'd be looking for," Bernard said, after speaking with Mohawk officials.

Laid-off workers will be applying for benefits, the mayor noted, at a time when the system is "overtaxed" with requests from people who lost work due to the pandemic.

Notice to workers

In a notice to employees Wednesday, Chief Operations Officer Dean Daigle wrote that "in the face of these unforeseeable circumstances, we have had to make the very difficult decision to wind down operations at Crane."

A copy of Daigle's message was posted by an employee to Facebook and reviewed by The Eagle.

Daigle wrote to workers that the squeeze stemmed, in part, from the coronavirus, which has restricted the kinds of social events for which Crane long has provided paper products, such as invitations.

The company also had felt the effects of losing its largest customer, Papyrus, which filed for bankruptcy protection in January, Daigle wrote. Sales through Papyrus were worth about $1.3 million a year to Crane, O'Connor said.

With that retailer gone, Crane is working to build a wider relationship with its second-largest customer, Paper Source. Beyond that, Crane products are sold online and through 1,700 small shops, O'Connor said.

"I'm not sure how many are going to be in business after this," O'Connor said.

A million-dollar investment in Crane's website, he said, will attempt to follow customers to new shopping venues.

"Sales on the internet are going to be a safer bet. This is where we're going to see more growth."

Duties unclear

The company told workers Wednesday that even though the federal loan ensures that they will be paid from Monday to June 19, they might not be required to show up.

Daigle's message said employees will be compensated at their regular rates of pay but will be notified weekly whether they will be asked to work, either from home or at the plant. He said the company isn't able to predict the level of staffing that will be needed during that time period.

Many workers already had been furloughed since the company was closed as a nonessential business in mid-March.

O'Connor said that terms of the federal loan allow it to use the money to pay workers, even though those employees might not be required to work.

"The program was meant to keep people on the payroll," he said.

O'Connor said the company applied for the federal loan before making the decision to reduce its workforce by 85 percent.

"All along, we hoped that things would open up more. Who's to say things don't open up more over the next eight weeks and I can keep 25 more [workers]. I could easily return that money, but they would be out of health care for eight weeks," he said of Crane's employees.

"We have a history of taking care of our people, and that's what I'm trying to do," O'Connor said.

Even with a reduced staff, he said Crane is prepared to fulfill orders.

Of all the acquisitions Mohawk has made, the purchase of Crane has been the most difficult, O'Connor said. "This has been the toughest one we've ever had."

He said he regrets having to reduce staffing at Crane.

"It's a bad decision. I hate making it," O'Connor said.

Larry Parnass can be reached at, at @larryparnass on Twitter and 413-588-8341.