Around and about the wide blogorama (and visual effects community), this has gotten some reaction.
After 11 years it appears that Asylum Visual Effects in Santa Monica is closing. ... Phones across Los Angeles were buzzing today with reports of a company meeting where everyone was let go, and in this socially connected world Twitter and Facebook exploded with the gossip including mentions of filing Chapter 11 ...
The above is a shocker only if you know nothing about today's visual effects business and the old visual effects business -- the cartoon industry.
When TAG was founded in 1952, there were a myriad of large and small cartoon studios in Los Angeles. There was Disney, there was Warners, there was MGM and UPA and a wide range of small commercial houses cranking out animation. Seven years later, the television animation business exploded and we got Hanna-Barbera, Snowball, Filmation, DePatie-Freleng and lots of others.
And fifty years later? Every one of those studios -- with the exception of Walt's place -- is gone, off to the great animation research library in the sky.
With visual effects houses, the turnover is brisker than it once was for cartoon studios. As an effects supe on "Dinosaur" told me a decade and a half ago:
"Effects studios are like mushrooms. They sprout up, bid for jobs, get big, and all of a sudden disappear. And the people who work at them go out and start their own places, and the cycle repeats. Then those studios disappear. ..."
Effects studios are not high-margin businesses. Competition is fierce, and the attrition rate is high. And one of the dirty little secrets attached to that attrition is: if you're a happy employee of Big Fish Visual Effects, Inc. who enjoys a 401(k) and health plan, when Big Fish rolls belly up, your 401(k) is safe (by Federal law) but your health coverage ends ... and there is no COBRA option to see you through those cold, jobless nights, even if the health insurance is Aetna, Blue Cross, or some other large health insurer.
Because COBRA only works if the company that is paying for it is ongoing. If the company liquidates, there is no COBRA. You are on your own.
(This sad fact smacked employees of a non-union feature animation studio in their collective faces back in the go-go 1990s. TAG made a vigorous attempt to organize the facility, came up short in the employee support department, and walked away. Eight months later, the company collapsed -- owing staffers a month's worth of salary and vacation.
Sadly, there was no money or assets to pay any employees what they were owed. There was also no money or government protection with health coverage either; the staff was left high and dry.
For a month afterward I fielded angry phone calls from unemployed artists, lamenting the fact that they hadn't signed rep cards and organized the place. As one of them said to me: "The bastards sill would have gone under, but at least we would have had Motion Picture Industry Health Insurance ...")