Check Printer to Lay Off 340, Close 2 Plants in Chatsworth

About 340 local workers for Deluxe Corp. will receive layoff notices in coming months as the company prepares to close its two San Fernando Valley printing plants.

Deluxe, a St. Paul, Minn.-based check-printing company, announced a companywide restructuring plan late last year, saying it would close 26 of its 41 production plants. The company aims to reduce its work force by about 1,200 nationwide.

The company’s two plants in Chatsworth--one at 20961 Knapp St., which employs 150 people, and another at 9353 Winnetka Ave., which employs 190 people, will be shut down and sold by the end of 1997, said Deluxe spokesman Stuart Alexander.

Employees were informed of the pending cuts several months ago but still don’t know when the shutdown will come.

At the Winnetka Avenue plant, employees on Monday displayed a weary pragmatism about their situation.

“You know it has to be, you can’t blame the company,” said MaryLou Cervenka, a seven-year employee in the order-entry department.

“It was the kind of job where it was OK, and you thought you’d stay forever. But nowadays, nothing is forever.”

Cervenka, 41, of Winnetka, said she had no plans but would “trust in God to get me through because there is no security now, not in your job, not even in your friends. They could leave tomorrow.”

The only Deluxe plant in the area that will be spared is the company’s printing facility in Lancaster. Some Valley employees will have the chance to reapply for jobs there.

The Lancaster plant is adding about 120 new positions to expand production to three shifts a day, said Alexander, the company spokesman.

It was selected to survive the cuts because--alone among the company’s Southern California locations--it had “room for growth,” and could absorb additional production demands, Alexander said.

Lack of suitable space for growth is one of the most common reasons companies give for taking jobs out of Los Angeles, said local business boosters.

“People have to understand that the San Fernando Valley is getting to be an older area,” said Jack Kyser, chief economist of the L.A. County Economic Development Corp. That makes keeping companies here “very, very difficult,” he said.

Kyser said Deluxe is one of many printing businesses that Los Angeles has lost in recent years. Some have migrated to Asia, where production costs are cheaper.

“These are fairly decent paying jobs. But where there is a lot of competitive price pressures, you can make a good try [at keeping them], but you still may not win,” he said.

Most Deluxe workers hold factory-floor-type jobs that pay upward of $10 an hour. The company has no union contracts.

With sales of $1.86 billion annually, Deluxe is the nation’s largest printer of checks, holding an estimated 50% of the market.

In recent years, the company has expanded rapidly into other financial services such as electronic check authorization and systems to track ATM-card debits.

Much of the expansion was in the late 1980s; many employees in the Valley plants said they’d gotten their jobs during a hiring boom about seven years ago.

But lately, the company’s profits have declined as electronic banking has become more prevalent and competitive pressures have increased.

Last year, the company posted a profit of $87 million, down 38% from $141 million in the previous year.

Although Americans wrote more checks in 1995 than in 1994, “we will soon reach a point where growth no longer exists, and there will be a plateau and decline” in check usage due to electronic banking, Alexander said.

Deluxe wants to reduce its annual operating expenses by up to $150 million in the next two years by shutting down plants, and by other measures, such as selling company planes and doing away with country club memberships.

The company has also shed its ink manufacturing business and other adjunct businesses.

It plans expansion into new services, such as helping banks ward off fraud through electronic tracking of problem customers, Alexander said.

Employees who aren’t rehired will be offered severance packages, Alexander said. To help employees prepare, the company has offered workers $2,500 in tuition reimbursements so they can train for new jobs before they are let go.

Trevon Limbrick, 24, of Los Angeles said he is one of few employees he knows at the company who’s already prepared for a new career.

Limbrick, a mail-room employee, has been using tuition reimbursements to go to night school in audio engineering, and will graduate in two semesters from Cal State Northridge.

Preparing for a new job while performing an old one isn’t easy, he said, but “with today’s economy you have to get used to it.”