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Recession forces Shelby County's largest employer to cut workers

December 15, 2008
Knauf Insulation is cutting 11 percent of its work force in Shelbyville as the recession prolongs the housing downturn that began two years ago. Knauf makes insulation used in construction, particularly new homes.

Knauf laid off eight of its 118 corporate employees Dec. 3. And in January, the company will let go of 65 hourly workers at one of its Shelbyville plants. Knauf's two plants in the city employ a total of 537 workers.

The German company is Shelby County's largest employer, according to the Shelby County Development Corp. Web site.

Shelbyville isn't the only Knauf location hurting. In September, Knauf announced that its plant in Shasta Lake, Calif., would curtail production for six weeks at the end of the year to work down bloated inventory levels.

"The insulation industry, along with building materials manufacturers in general, is feeling the negative effects of the dramatic slowdown in the residential housing market that has occurred over the past two years," said Knauf President Bob Claxton.

Claxton oversees Knauf's U.S. operations, which employ 1,250, according to the company's Web site. Knauf came to Shelbyville in 1978 when it bought a fiberglass factory there.

"As we have been for the past three decades," Claxton said, "Knauf is confident we'll weather this downturn and continue stronger than ever."

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