It’s one thing to watch in awe all the devastation and destruction caused by natural disasters such as floods, hurricanes and the like on television from the comfort of one’s home. But it’s another situation entirely when it’s happening in your backyard—or on your doorstep, for that matter.
The latter scenario is precisely what the operators of Foam Products faced back on September 26 when Hurricane Helene’s landfall reached Erwin, Tenn. That’s the site of one of the company’s three production plants. Torrential rains caused the nearby Nolichucky River to reach in excess of a record 24 feet. The subsequent overflow poured into the industrial park and the Foam Products facility. According to a local news outlet—the Knoxville News Sentinel—the flood waters reached a height of 7 feet inside the plant, breaching walls, twisting sturdy support beams and pulling debris like steel cable barriers from nearby Interstate 26 onto the property.
Thankfully, Foam Products did not suffer any loss of life as a result of the flooding. That’s because Perry Muse, vice president of manufacturing and general manager, decided to proactively close the plant in advance of the impending storm. “That was the first time in 15 years that I closed the factory on account of weather,” he told FCNews. “And I’m glad I did; I care very much about our employees, and I wouldn’t have been able to handle that if something happened to any of them.”
What Foam Products has had to contend with, however, is the prospect that the Erwin facility—which produced flooring underlayment as well as women’s undergarments—may be closed permanently as a result of the extensive damage caused by the flooding. Erik Arnold, president of the Calhoun, Ga.-based company, estimates that Helene caused approximately $20 million in damages if a total rebuild is needed.
Adding insult to injury, he noted, is the fact that the company did not have flood insurance. The owners determined it was not needed because the industrial park on which Foam Products operates sits in a Federal Emergency Management Agency-designated 0.2% flood plain, an area the agency considers a 500-year flood zone. The risk of severe flooding in this area, experts say, is low to moderate.
“All these weeks later this is still a supercharged emotional situation for us—having a facility that we’re getting no help on, and we had all these comprehensive policies,” Arnold stated. “We even have a terrorism policy. We bought it because it was simply recommended to us so we’d be fully covered, and we thought we were doing the right thing. Fast-forward to today, we’re looking at, potentially, a complete and total loss.”
While FEMA workers initially visited the area to render aid to local residents, according to Muse, there’s not much the agency or insurance companies can do to help affected businesses like Foam Products. “The governor [Bill Lee] visited our area on Oct. 2, but to date we have no promise of anything except that they’re ‘working on something,’” Muse told FCNews. “So FEMA is here to help the residents, which is great, but for the businesses, they told us to go apply for a loan. The economic development people said they have the ear of the governor, and that he’s going to do something, but it may not happen until after the election. I’ve seen where the governor had declared the area a disaster area and asked for federal assistance, but Congress has gone until after the election, so I don’t know if we’ll hear anything.”
Muse, who has been visiting the site every day for a month since the hurricane, said it’s all still shocking and surreal for him. “We’re on our own for cleanup, and we’re on our own for security,” he said. “I describe it as being on Gilligan’s Island with no power, no water and no hope for rescue.”
In the meantime, Foam Products has applied for a small business association loan, but even that process is fraught with bureaucracy, Muse said. As he explained: “It’s one of those things where every week you turn [documents] in and then they come back the next week and say, ‘OK, now we need ABC.’ So then you put that together and you submit it again. Well, that’s been going on for weeks now, so we have no funds. The choice is basically this: We reach into our pocket and we spend several million dollars cleaning up in hopes that we get reimbursed through one of those programs, or we wait to find out how much money we’re going to be awarded and then work based off of that and make a decision.”
‘A bittersweet crossroads’
Oddly enough, the devastating floods happened at a time in the company’s nearly 46-year history when there was a high degree of excitement and jubilance. After all, Foam Products had just recently completed a $15 million investment in its underlayment facility across the border in Trion, Ga. The state-of-the-art IXPE production facility was in keeping with the ongoing trend of moving more manufacturing back to the U.S. Now, this facility will look to take up the slack caused by the loss of underlayment production at the Erwin plant. However, this particular factory is not equipped to handle garment production—which means the company stands to lose that business (and a major account) altogether.
“A few years ago, we paid to have new, state-of-the-art machinery installed in Calhoun so we could run the same flooring products at Erwin and Calhoun,” Muse explained. “When Helene struck, we were able to take some volunteer employees from Erwin over to Calhoun to help get manufacturing started for the flooring products that were only made in Erwin. And we’ve been able to successfully do that and not miss any orders.”
Foam Products, unfortunately, was only able to repurpose a handful of employees from the Erwin facility. In its heyday, the company’s Erwin facility employed roughly 70 people. Just prior to the flood, it employed 38 people. Now it’s down to nine workers. “We have a reputation and a record for keeping employees,” Muse, a 23-year company veteran, stated. “Employee retention is fantastic at Foam Products—not just in the Erwin facility but also in the Calhoun facility. We have employees who stay for a long time.”
Arnold described the predicament as a “bittersweet crossroads,” telling FCNews: “We’re dealing with complete devastation in Tennessee. I’m truly at a loss for words in describing my emotions. It’s just heartbreaking. At the same time, we are juggling euphoric emotions of a huge investment in Trion that’s opening: a gorgeous IXPE production facility with all state-of-the-art equipment ready to go.”
If there’s a silver lining amid the catastrophic loss, Arnold noted, it’s the fact that the company is in a position to service clients on the flooring side of the business. Recouping losses from the destruction of the Erwin facility, however, may prove to be more elusive. His advice to manufacturers? “Don’t assume you’re fully covered with buying recommended insurance policies. I would caution everybody else in the flooring industry to take a look at what you’re insured for and what loopholes might exist in your policy.”
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