It has been a couple days since we last connected about the COVID-19 crisis and Coastal‘s response and plans. It is likely clear to everyone that these are unique and difficult times and it is hard to know what to do at times.

It is still true that no Coastal employee has tested positive for the virus. We are doing everything we know of to protect all our team members as they return to the office as essential workers. Soon, we will be open for normal business and we will continue to be vigilant. We are taking temperatures as our team members come into the building, encouraging social distancing, providing PPE masks for employees, and have enhanced our cleaning procedures. It would be quite an accomplishment for us to get through this first wave and not have any of our employees be negatively impacted by COVID. As fortunate as we have been at work, cases continue to increase in the area, so we ask you to continue the recommended habits both at work and at home.

After securing the health of our team members our focus shifts to securing the viability of our business. So many people count on the success of Coastal for their personal and professional goals that we must find the best path to a healthy business. A healthy Coastal is in the best interests of each person associated with our company, our customers, employees, owners, suppliers, and our communities. It is a challenge to manage all those interests in good times and it gets even more crazy in times like these.


As messy as this is, it was never an economic matter leading to reduced sales. The market will rebound and the vision and plans for our companies will return and we will continue to work on all the plans and goals we have for growth and customer service.  Some of our short-term financial targets are taking a hit, but not our view of or plans for our future.


The first thing we did was to cut costs to protect our cash until we saw the impact of the virus. It’s horrible, but we laid off nearly all of our team members with the knowledge that the government would; provide unemployment support with the federal government offering nearly twice the normal unemployment, extend the duration of unemployment by 50%, and send most people a “stimulus check” to help meet their needs.  It is possible that more will be done, and we are staying on top of that for us all.

In both Coastal businesses, we have been designated as “essential” by many of our customers. To that end we have staffed our office and operations to meet the demands they ask of us.  Often this work has been done remotely, but unfortunately, we cannot make boxes or cut IMPAXX from our kitchens and living rooms, so some of us have been asked to come to our facilities.

We have applied for and received funds from the Payroll Protection Program from the Small Business Administration. We received this money on April 4th, and it is an eight week program the purpose of which is to get people back on the payroll at their job. So, we put everyone back on the payroll and continued everyone’s benefits. Unfortunately, we are running at much lower volumes then usual and so not everyone needs to be at work. We are under a “stay at home” order and so only people required to do essential work are being asked to come in.  These funds are a “grant” meaning that we do not need to pay them back. If we don’t use the funds for paying our employees, the money becomes a 24-month, low interest loan. We would rather pay our people.  Absent these funds, Coastal, like many businesses our size, would be in a very difficult condition.  

Let’s also be clear about what constitutes essential work. If a customer asks that we produce for them, we require an officer of that company to send us a letter stating that they are essential. We will not contest their request of us, we trust they are compliant with the law. Following that, we will need to produce parts and conduct all the work that supports our ability to do production work.  So, planning, scheduling, maintaining equipment, maintaining our facilities, preparing equipment to meet future demand, sales, finance, customer service, engineering, design… are all types of work that need to be done in support of essential demands.  Once the “stay at home” order is lifted, then we are free to do all sorts of work.  At that point, we will do all we can to set ourselves up to be stronger and more successful as quickly as possible.


Last week, Governor Whitmer extended our “stay at home” order to May 15th and we do not have a guarantee that the all clear will be sounded then. So, between now and then some people will be asked to come in to meet essential demand. With clarity of the staffing needed to meet our essential demand, we can now report that for the period of April 20th  to May 15th, any production work that will be done will be compensated with a 30% increase in base pay. This will not apply to salary team members. We will also look at creative staffing plans to balance the demands of the essential work among team members.

At the end of the eight-week PPP period we will no longer have the PPP funds and so we will be required to staff the companies according to the real work demands. We are not expecting that the economy will come back to full production quickly.  What this means is that following the conclusion of the PPP program it is likely that some team members will return to an unemployment status. When this happens our team members will become eligible once again for the state and federal funds.

This week we are also having our Q2 quarterly supportive review meetings. At these planning sessions, the executive teams will meet and align around the work that is critical for each company for this quarter. When we have these priorities, we will communicate them to all of you quickly.


Things are happening fast, and we will learn more and more about the markets response and what that means for us and our work.  We are also operating on the assumption that the Michigan “stay at home” regulations will begin to be removed in the middle of May. And, we will communicate fully and quickly as we get new information.

In both businesses there is good reason for optimism in the second half of the year. Container and Automotive continue to attract and win new customer programs and awards. We believe the piece we have yet to see is the volume and ramp up that is attached to these new customers. It is our view that there will be some softening through the third quarter end then some building through the fourth. We are building our plans with these assumptions knowing full well that everything could be different tomorrow. What we can assure you is that we will not sit around and wait for stuff to happen to us. We will always have a plan and we will always be flexible on its execution.


The last thing I would say is that many people are working very hard on the first two goals we made in this note; keep our people healthy and position Coastal to come out of this mess a strong company able to serve all the people connected to her.  It feels at times, like we are shooting skeet from a moving train. So, we are likely to make mistakes, not communicate perfectly, have things slip through the cracks, but I assure you none of this will happen for lack of effort nor a desire to help.  I’d ask two things; first assume everyone is doing the best they can and be grateful for that, second, communicate to us what you think we need to hear so we can better serve you.