Posted on: Friday, March 26, 2004

Call center in Hilo to close

By Kelly Yamanouchi
Advertiser Staff Writer

A major call center that was hailed as a solution to Hilo's chronic job shortage when it opened in 1999 will shut its doors in May and lay off all 172 employees.

Pennsylvania-based Penncro Associates Inc., a telemarketing and bill collection company, was enticed to open a Hilo office with state tax incentives and inexpensive office space. The company quickly became the fourth-largest employer in Hilo, making up for some of the sugar industry jobs lost in the 1990s.

"The closing of the sugar industry here 10, 15 years ago hit the blue-collar community really hard. There were just a lot of regular, fine folks that worked hard and earned their money that all of a sudden didn't have jobs," said Jim Kennedy, president of the Hawai'i Island Chamber of Commerce. "They (Penncro) offered jobs that fit into that niche very nicely, and it's a real shame to see them go."

The closure is "a result of unforeseen business circumstances due to the loss of client business at this site," Penncro said in a notice to the state Labor Department.

The company said it will lay off 150 collectors and about 22 managers and administrative staff by May 15. Most of the workers are high school graduates earning $7 to $9 an hour, department spokesman James Hardway said.

The layoffs will be staggered from March 31 through May 15. The employees are not unionized.

Hawai'i County's unemployment rate was 5.2 percent in January, higher than the statewide rate of 3.8 percent.

The state Labor Department is sending a team to help workers fill out unemployment insurance forms and get services such as counseling, evaluations and job training.

Alu Like Inc., an education, vocational training and employment program for Native Hawaiians that helped place employees at Penncro, also will help them find other jobs, said Carla Kurokawa with the agency's employment and training program.

Penncro officials did not return calls yesterday.

The company has other locations in Taos, N.M., McAllen, Texas, and Southampton, Pa., according to its Web site.

Its employees make calls for client banks, collection agencies and mortgage companies. The company said it chose Hilo for a call center because of the five- or six-hour time difference from the East Coast. The state has marketed that difference as an advantage for call centers.

Business leaders on the Big Island worked to attract Penncro to Hilo.

Penncro found inexpensive office space on the second floor of the old Ben Franklin store building on Kilauea Avenue. The Hilo site opened with just eight workers, but grew rapidly. It touted jobs paying up to $25,000 a year in salaries, commissions and bonuses.

Penncro also was offered reimbursement by the state for 50 percent of job-training costs and received benefits from being in a free-enterprise zone, meaning it got a four-year exemption from the general excise tax and seven years of income tax breaks for creating jobs.

The Hilo center won the "Native American Employer of the Year" award in 2001 from the U.S. Department of Labor, according to the company's Web site.

At one point Penncro planned to employ 300 workers in Hilo, which would have made it East Hawai'i's largest new employer in more than a decade.

"Having a business that could create a fair number of jobs in that kind of middle sector was really a very positive aspect of their being here and one of the reasons that we were so pleased to see them come," said Kennedy, the Chamber of Commerce president.

"It certainly is a loss."

Reach Kelly Yamanouchi at kyamanouchi@honoluluadvertiser.com or at 535-2470.