Impact of tariffs helps former Garbo employees be eligible for additional benefits, training
Groton — When China implemented a 25 percent tariff on seafood from the United States in reaction to U.S. tariffs, last summer, company officials at the Garbo Lobster facility on Thames Street reported that they got calls overnight from China to cancel orders.
The Groton facility shuttered six months later, and East Coast Seafood Group, Garbo Lobster's parent company, announced it would move the operations to its other facilities in the Northeast.
The state Department of Labor asked the company last week if tariffs imposed by China had any direct impact on the closure, since when a facility closes due to foreign competition employees are eligible for additional benefits under a federal program. The company said the closure was a relocation due to a planned restructuring, according to state Department of Labor Communications Director Nancy Steffens.
East Coast Seafood Group said in a statement last week that the consolidation "is the result of years of careful planning and the next step in a unique partnership between East Coast Seafood and Garbo Lobster." The company is moving the bulk of the work that was carried out in Groton to a 100,000-square-foot Prospect Harbor, Maine facility that East Coast Seafood and Garbo Lobster jointly acquired in 2012, and the rest to the company's "new state-of-the art lobster processing line" at its facility in New Bedford, Mass.
But after gathering more information, including by talking to several employees and reading news articles, state Department of Labor officials filed a petition with the federal government requesting that the employees be certified eligible to receive federal Trade Adjustment Assistance funding, Steffens said this week. The funding can be used for training, education and job-search services for employees affected by foreign competition.
East Coast Seafood did not immediately respond to a request for comment on the Department of Labor's decision.
"I'm really pleased that the commissioner just went ahead on behalf of the employees to get this application submitted," said U.S. Rep. Joe Courtney, D-2nd District. Courtney said his office assisted the department with the application by flagging the news of the closure, and one of his staff used social media to find former employees who will be part of the application.
It was during Courtney's visit last summer to the Groton facility on the impact of tariffs that Garbo Lobster President Dave Garbo said, "The tariff is putting us out of business," while Garbo Lobster General Manager Chris Brown said, "It was like a light switch. Overnight, we got the phone calls to cancel," The Day reported.
Courtney said that based on the comments made last summer and the effects of the counter-tariffs reported up and down the coast, "it would sure seem to me there is a credible basis to get more help for people who lost their jobs."
He said there is no surcharge or cost to an employer to provide access to the program, which provides enhanced benefits to employees whose company closed because of trade-related causes, including access to job training and educational programs. He said the program helped employees when Crabtree & Evelyn closed a facility in Woodstock, as the company faced competition online from overseas producers of soaps and lotions.
Steffens said the Department of Labor activated the Rapid Response Team it has to help employees faced with layoffs find new jobs, as soon as the state agency read the news that the 33,000-square-foot Garbo Lobster facility would close on Jan. 17. Garbo Lobster, which described itself as "the largest wholesale distributor of live lobsters in the world," was founded by Dave Garbo and his brother in Stonington 36 years ago, according to the company's website.
The team informs employees about how to file for unemployment benefits and services available at the American Job Center, including "career specialists, résumé writing services, computers, workshops, our CTHires job bank, recruitment events employers hold at the centers, and related services, such as childcare providers or transportation services," she said. The company invited the agency to provide informational packets to the employees.
East Coast Seafood Group said in last week's statement that it is "offering positions at other subsidiary locations where possible, absorbing benefit costs of covered employees for a period of time, offering severance to each employee affected, and providing recommendation letters and other support requested by employees during their transition. The company's first priority is the employees affected by the consolidation and providing them the support they need as they move to alternative employment opportunities."
East Coast Seafood Group said it is making heavy investments in the Prospect Harbor, Maine facility to boost production and labor needs.
"By strategically enhancing a facility that is geographically located in the heart of the resource, the company is recognizing greater efficiencies and creating value for all stakeholders," the company said. "The expansion in Maine and additional investments in the Massachusetts operation will enhance East Coast Seafood Group's entire operational model and is forecasted to increase workforces across the company's subsidiaries."
East Coast Seafood did not respond to questions regarding the number of people who were employed at the Groton facility or how many people were offered positions.
Interest shown in property
Courtney said Trade Adjustment Assistance is a good program for employees and their families, and it also benefits the region to get employees back into employment.
"It's really tied to getting people reconnected to the job market," Courtney said. He added that former Garbo Lobster employees interested in learning more can contact his office in Norwich or the American Job Center in Montville.
Steffens said the U.S. Department of Labor may have questions or ask for additional information as the federal agency reviews the petition, so it can take as little as a few weeks, or up to several months for U.S. Department of Labor to make a final determination.
"I think any actions that are going to help employees land on their feet is favorable, and I'm all for it," Groton City Mayor Keith Hedrick said in reaction to the state Department of Labor's filing of the petition.
Hedrick said there also may be opportunities for former Garbo employees to find employment at Electric Boat or through the manufacturing pipeline.
Meanwhile, the city is looking ahead to what could come next for the property along the Thames River.
Hedrick said the closure of the Garbo facility is a loss for the city. But as much as it is a loss, it opens up opportunities for economic development on Thames Street.
Hedrick met with a developer last week who is interested in the property and other property on Thames Street, though nothing solid has come from it.
"Once it goes on the market, I think we’ll get more interest," he said.
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