POST FALLS - The Kimball Office furniture manufacturing plant here will be shutting down and consolidating with its base operations in Indiana.

About 260 employees at the facility were informed on Wednesday.

"This is certainly not a reflection on the employees or the operation," said Marty Vaught, public relations director for Jasper, Ind.-based Kimball International. "More than 80 percent of our installed base of customers are east of Denver, so there's a tremendous amount of transportation costs. It was purely an economic decision."

Kimball International has owned the facility under three different names - Harpers, Flexcel and Kimball Office - since 1994. During its peak, the metal fabrication facility employed as many as 450.

"This was not a decision that was made lightly," Vaught said, referring to the economic impact.

Vaught said employees will be offered a severance package. He didn't believe the first layoffs would start before Jan. 1, but perhaps in six months.

"This will be a very slow process over the next 24 months," he said, adding that there will be no customer disruptions during the transition.

"A lot of companies would have just put a padlock on the door, but this will be a gradual drawdown in terms of capabilities and positions. We've worked hard to be a good company in the community and we don't want to leave with a bad taste. We've tried to give employees as much of an advance notice as possible."

Vaught said Kimball is actively marketing the 475,000-square-foot facility and is in negotiations with a potential buyer or buyers. He declined to say what companies are pursuing the facility.

"We plan to use our influence to help employees either find work, retrain them or assist them with job placement," Vaught said.

Vaught said employment opportunities may arise for some of the employees with the possible buyer and at Kimball's facilities in Indiana.

"The facility (in Post Falls) is excellent for manufacturing and we have a skilled workforce, so that may be of benefit to other manufacturers in the area," Vaught said.

Steve Griffitts, executive director of the Jobs Plus recruitment agency in Coeur d'Alene, agrees.

"We've been made aware of the situation with Kimball and we will do all that's in our power to allow those employees whose jobs are affected to find employment in Kootenai County," Griffitts said. "This process has been extensive and Kimball has been a great partner in helping us take care of these valued employees."

Vaught said the company was hurt during the recession and by the combination of competition and transportation costs.

In a press release, Kimball International CEO and Chairman Bob Schneider said: "Today's announcement to better optimize our supply chain and manufacturing footprint, and to reduce our cost structure post-spin, reflects our focus on our markets and positions Kimball for long-term growth."

Schneider said Kimball's Post Falls employees have had a great work ethic and an excellent record for quality, reliability and dedication.

"I'm proud of their service to our customers," he said.

A Kimball employee, who declined to be named for fear of retaliation, said both shifts were notified of the company's decision during an afternoon meeting that lasted 10 minutes tops. They were given a letter about the decision.

"You could have heard a pin drop," the male employee said, adding that even managers appeared to be surprised about the announcement.

The employee said he has been working at the facility for 20 years and is making $15 an hour. Many employees are making $12 to $13. He said he has not received a raise for the past seven years. He said some entire families, including both parents and their children, work at the facility.

Company leaders who made the announcement did not take questions from the employees, the employee said.

"Starting (today), we will begin to address your questions in smaller group meetings," the letter given to employees states.

The letter states that, if the sale with the potential buyers is approved, Kimball will lease back about 300,000 square feet of manufacturing space.

"This would be good for the community and could provide potentially some ongoing job opportunities as we transition production from here," the letter states.