Simi Valley Furniture Plant Files for Bankruptcy, Announces Layoffs

Reeling from an industrywide sales slump and the cost of complying with air quality regulations, a Simi Valley furniture manufacturer once rated as one of Ventura County’s top polluters has filed for bankruptcy and announced large layoffs.

Representatives of Wambold Furniture, which operates a factory and design studio in Simi Valley and a distribution center in Moorpark, declined Tuesday to release exact figures on the employee layoffs.

But a company spokesman said the cutback involves more than 100 workers, with more than 400 others retaining their jobs.

The 19-year-old company, whose oak living room, dining room and bedroom furniture is sold nationwide and in Canada, filed a petition Friday in U. S. Bankruptcy Court in Los Angeles, seeking protection from creditors under Chapter 11 of the bankruptcy law.

The firm made this step and the layoffs public Tuesday.

“As painful as this action was, it was necessary to allow the company to continue operating,” Greg Wambold, the firm’s president and owner, said in a written statement.

He added: “By putting our past debts on hold and increasing our productivity, we can make a fresh start with our vendors and ensure continued deliveries of product to retailers.”

Wambold’s present management remains in control of the company. The firm has about 120 days to present a debt repayment plan to the court.

Wambold’s Chapter 11 petition listed liabilities of $13.8 million and assets of $15.9 million.

“The furniture business is tough in today’s environment,” Mayor Greg Stratton said of Wambold’s announcement. “If you look at the number of furniture stores that have gone out of business, you’d have to think that the people who manufacture furniture are also in trouble.”

Wambold executives said one reason for the firm’s financial problems was $2.5 million in unpaid bills from retail furniture stores that went bankrupt.

The company also cited the rising cost of workers’ compensation insurance and the high cost of complying with federal air quality rules.

According to a U. S. Environmental Protection Agency report, Wambold placed fourth highest among Ventura County companies that released toxic emissions in 1990.

In recent years, the company has installed costly equipment to prevent lacquer and solvent fumes from escaping into the atmosphere, Wambold spokesman Art Detman Jr. said.

The firm had to spend $1 million to rebuild its air-quality system after federal officials banned one of it solvents as a cancer-causing agent, forcing the company to switch to different recovery equipment, Detman said.

Wambold’s Simi Valley factory at 6800 Smith Road was once expected to be the first development in an east Simi Valley industrial park.

But noise from the factory triggered complaints from nearby residents, prompting the City Council to eliminate plans for more industrial development near the Wambold plant.

Stratton said the company has taken steps to reduce noise at the plant, and city officials have heard few complaints from neighbors in recent years.

The recent layoffs were the first since Wambold laid off 105 of its 555 employees in January, 1992, citing a decline in sales.

In June, the company made two small cuts in its work force, but most of the new layoffs were made July 9, Detman said. The firm also increased its workweek from 37 1/2 to 40 hours.

Mike Starkey, Wambold’s vice president of manufacturing, described the layoffs and the Chapter 11 filing as “a painful but necessary step. It gives us the opportunity to move forward and try to maintain the remaining jobs.”

He added: “We feel quite confident that it’s a strong and viable business. We just need some time to prepare the restructuring plan.”