SALEM – Old Virginia Brick, a Salem manufacturer of wood moulded brick since it was founded in 1890, announced through a letter this week that it is suspending operations and furloughing most of its workforce while it develops a strategic plan.
According to the letter from President C.W. McNeely III posted on the front door to the company’s Salem office, the closure stems from “current financial pressures” caused by a “seven-year decline in demand for brick used in high-end custom homes and prestigious architectural and paver patterns.” The company’s financial records were unavailable, since it is privately owned.
Frank Rizzo of Max Advance, a privately held financing company based in New York, contacted the Salem Times-Register on Tuesday seeking information on Old Virginia Brick. Rizzo said that Max Advance is “a judgment creditor who is involved in litigation with Old Virginia Brick for breach of contract.” Max Advance specializes in working capital lending.
Founded by George Pierpont in 1890 as Old Salem Brick, the company changed its name to Old Virginia Brick in the 1950s. The company has operated in Salem continuously, except during World War II, and bought a second plant in Madison Heights in March 1995.
Old Virginia Brick was featured in an October 2012 edition of the Salem Times-Register, when it obtained a $1 million Small Business Association guaranteed loan that helped the company bring 31 workers who had been furloughed at the Madison Heights plant back to work.
McNeely III has served as chairman of the company since he bought it in 2005. In the letter posted on the Salem office door, he said the strategic plan being developed would restructure the company, transition the leadership team, improve business performance and strengthen the business’ financial foundation.
“We are considering every alternative for the future of Old Virginia Brick, from engaging with new investors – an opportunity that would enable us to restart production to meet ongoing customer demands – to the possibility of seeking the protection of the U.S. Bankruptcy Court while we restructure our business, with the intent to preserve the value of the company until we re-establish a firm financial position or place the company up for sale,” McNeely wrote.
He added that staff is assisting customers in completing existing orders, but is unable to accept new orders for products at this time.
The Salem office did not respond to calls Wednesday morning; however, an employee of the Madison Heights plant said employees were aware of the company’s financial struggles early this month. The employee, who wished to remain anonymous, said on Wednesday that only one or two people reported to work at the Salem plant, which had around 62 workers prior to this week. The employee who answered the office phone was the only person working at the Madison Heights location Wednesday, which had employed 41 people.
“From what I understand, right now the company is looking for someone to buy it out,” the employee said. “I’m just here to wrap a few things up today, then I’m headed out too.”
– From staff reports