<b>Roofing Plant Reducing Employment, Struggles with Markets</B>

IKO Monroe, Inc., a Monroe, Mich., roofing products manufacturer laid off close to half of its staff this past week. The company has been embroiled in legal battles over odors emanating from its local factory. According to press reports 30 of the company’s 75 employees will be laid off.

The company cited a soft market for its products, the high cost of production at its Monroe plant, and the costs involved in its running legal battles with the plant’s neighbors and government agencies as reasons for the change in operation, the Toledo Blade reported.

The plant had been under criticism by the city of Monroe, the Michigan Department of Environmental Quality as well as local community groups over emissions generated by the plant’s paper line that were considered greater than acceptable by community standards. The Michigan DEQ stated that the odor problems were not in compliance, and the plant was mandated to have a permit to operate the paper line. IKO uses recycled paper products to produce its line of roofing materials.

According to a spokeswoman from the Michigan DEQ the company has until Dec. 18^th to submit an application for a permit for its paper line.

The city of Monroe lured the recycling company to the city in part with a 12-year tax abatement that was approved by local and state officials in late 1999.

"The problems IKO has been having with its neighbors, and the City of Monroe, culminating in the decision by the court last week, has made IKO reluctant to commit further large capital expenditures to make the paper mill operation economically viable, at least until the conflict is resolved," according to a statement released by the company.

The release cited $30 million already invested in the plant, but added that much more is needed, and the pending legal battles — as well as a shift in the roofing paper market — may not warrant the investment.

"IKO’s Chicago plant will shortly convert to fiberglass only," reads the press release. "These actions will eliminate all IKO manufactured organic-based shingles in the U.S."

Plus, "The cost of production in Monroe is significantly higher than in other IKO felt paper mills. Improvement would require significant additional investments."

"We have not given up and are not walking away from this operation. Over the next few months, we will attempt to work out a plan with the court and the city that will satisfy all parties," the release reads, according to the Monroe Evening News.