Wayne White | Managing Editor
OSAGE CITY—Osage City’s longtime housing manufacturing
plant, KanBuild, Inc., laid off most of its employees Friday,
citing a reduction of new home orders to a level that will no
longer sustain continued operations. Workers were notified during
a noon meeting at the plant.
Company officials said the suspension of operations effective
Feb. 18 was due to a protracted housing recession, tight new home
financing and harsher than normal winter weather.
“The company remains hopeful that an influx of orders or
a new financial partnership will see the 78 current workers return
to their jobs in early spring,” said KanBuild president
Robert explained Monday that although winter is usually a slow
time for the housing industry, the company saw soft sales for
a longer period than expected, from November to the present.
“When it’s cold like that, the phone doesn’t
ring,” Robert said. “Long periods of bad weather compound
He said the plant hasn’t been operating at full capacity
for almost three years, and while employees have experienced slowdowns
in the past, most have seen shortened work schedules since Christmas.
He described the last three years as “brutal.”
Robert said that employees were officially notified of the plant
shutdown last week, but most have been aware that sales have not
been sufficient to keep the plant operating full time.
“A good share (of employees) have probably worked two full
weeks since Christmas,” Robert said.
He said that as the last few orders were being assembled at the
plant, employees were called in to work according to their departments.
As of this week, only houses owned by the company remained on
the property. All completed orders have either been delivered
or are being delivered.
“We made sure all of our retail customers got their homes,”
This week, department managers continued to work to maintain and
properly store equipment for the shutdown.
According to information provided by the company in a press release,
the plant in Osage City has operated almost continuously for over
25 years, producing more than 6,000 houses. The plant’s
best year, 2001, saw production reach nearly $20 million, with
KanBuild’s combined sales level for the year reaching almost
$30 million. During its peak operation, the Osage City facility
employed approximately 275 people, and in conjunction with its
other production facilities, the company employed a total of 500
The company was sold that same year to a publicly traded competitor,
Coachmen Industries, which operated the plant under a subsidiary,
All American Homes. In the fall of 2005, All American Homes announced
its intention to close the facility permanently, and John Samples,
now CEO and majority stockholder, led a group of local investors
to repurchase the closing facility as he had done in 1989.
The company now has two facilities, the manufacturing plant in
Osage City and a retail outlet at Lebo. The Lebo outlet will also
close as a result of the shutdown.
“In all, KanBuild has operated the Osage City facility 17
of its 25 plus years of existence,” Robert said, “both
times, resuming operations after large corporations had chosen
to close the local facility.”
Robert noted that during the most recent economic downturn, the
nation has seen housing starts decline at a rate greater than
what was seen during the onset of the Great Depression. He pointed
to bankruptcies of several of the nation’s top housing manufacturers
as a sign of the difficulties faced recently by the housing industry.
“In the last 30 months, anywhere in the nation, housing
has been terrible,” he said. “We thought we’d
see some kind of up tick, but this slump’s been longer than
Robert said that in addition to the lay off of production employees,
all managers, administrative personnel, and drafting department
employees will see their jobs end within 30 days unless orders
increase or investment capital is raised. He said his job would
also end in 30 days if orders don’t pick up.
“Each week we go into this, more people will be laid off,”
He said many of the company’s current employees are longtime
employees who have weathered the previous shutdowns and owner
“For the most recent two years, these employees have willingly
stood by the company in spite of very few months that saw 40 hour
work weeks,” he said. “We realize the sacrifices that
they have endured to do this and are humbled by their commitment.”
He estimated 70 percent of the affected employees are Osage County
residents, with others from Burlington, Emporia and other surrounding
Noting the ongoing recession of the last few years, “We’ve
got our employees through two and a half years of it,” he
He said company staff assisted employees in filing for unemployment
benefits after announcement of the closure.
Robert said that despite the shutdown, there still exists a chance
the company will survive the current financial climate, and company
officials continue to investigate possible capital investment
“We’ve been talking to some investors,” he said.
“We’ll know by three weeks – by March 15, we’ll
know if we’re going to go or stay,” he said. “Us
closing it down doesn’t necessarily mean the end of it.
Even if we closed it, I wouldn’t say it wouldn’t open