Zippo to Lay off 15 Percent of Workers, Knockoffs Partly to Blame

Source from:  The Associated Press September 28, 2006 10/08/2006

PITTSBURGH The maker of Zippo lighters plans to lay off about 15 percent of its work force, partly because counterfeits of its trademarked lighters are undercutting sales and profits. Along with the counterfeiting, which the company said is in large part the work of Chinese firms, Zippo Manufacturing Co. also blamed "often confusing" Transportation Security Administration regulations governing the transportation of lighters on airplanes, as well as increases in gasoline and heating fuel prices and anti-smoking pressure. The planned layoffs will affect 121 workers and are effective Friday. "We truly regret these layoffs, but business conditions have simply forced us to reduce costs in all areas including personnel levels," Greg Booth, Zippo's president and chief executive officer, said in statement to employees Wednesday. "Should business pick up substantially in the months to come, we hope to be able to call back some of those who were laid off." Despite strong sales in several overseas markets, Zippo said its business in Japan and China had been hurt substantially. It was not immediately clear how significant a role knockoffs played in those markets. Last month, Zippo filed its first complaint with the U.S. International Trade Commission to stop the manufacture and sale of counterfeit lighters since the company obtained trademark registration four years ago. Many of the knockoffs come from China and the complaint named four Chinese companies. The imitation Zippos consume 30 percent of the company's business, company attorney Jeff Duke said in August. He also estimated that knockoffs had already cost the company about 150 jobs. The Bradford-based company employs about 800 people in McKean County, a rural area along the New York border. Zippo, founded in 1932, makes between 12 million and 14 million lighters a year. Several million fans collect the thousands of designs it has offered over the years. Enditem