The News Journal from Wilmington, Delaware on June 2, 2009 · Page 7
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The News Journal from Wilmington, Delaware · Page 7

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Tuesday, June 2, 2009
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www.delawareonline.com TUESDAY, JUNE Z 2009 - THE NEWS JOURNAL A7 No sign of retraining funds for Chrysler workers Ex-Newark employees never get $10,000 By GINGER GIBSON The News Journal Former Chrysler workers in Newark who were told they would get up to $10,000 for education and retraining as part of their severance are learning that an arrangement between the automaker and the state never materialized and those funds aren't available. The company told workers after the plant closed in December that the money would be administered by the state, but Delaware officials say that promise was made without their consent and would have required the state to make the payments upfront with the promise of reimbursement from a company nearing bankruptcy. Because the state wasn't willing to front the money and Chrysler didn't sign on to another arrangement, any hope of those job-training funds disappeared when the company entered bankruptcy. "No one got the money, not one state, not one person, not one dislocated Chrysler worker ever received that $10,000," said Delaware Department of Labor representative Bob Strong. Strong said Chrysler wanted the state to pay for worker training and the company would then reimburse Delaware, an arrangement that concerned state officials because of the automaker's precarious financial condition. The state didn't even know Chrysler had told its former employees the funds would be made available through the state until people began calling the Department of Labor to ask how to get the money, Strong said. The department then contacted Chrysler, which made an offer: The automaker would pay the state $200,000 to train 800 employees - $250 a worker -sending the money in four installments over the course of a year, after the training had been conducted, Strong said. The state counteroffered to conduct training programs if Chrysler would pay for them upfront, Strong said. But before hearing back from the automaker, he said, Chrysler filed for bankruptcy and discussions ended. Representatives from Chrysler did not return calls or e-mails requesting comment. Brian Selander, with Gov. Jack Markell's office, said all of the workers interested in training ultimately entered the state's existing job-training program for the unemployed, which is funded with state and federal money. "The department worked over the course of weeks and months to ensure that the Chrysler workers got trained," Selander said. "But the department could not put up money f on Chiysler's behalf knowing that Chrysler was facing bankruptcy for a promise that had been nade without any involvement of the Department of Labor t begin with." Maxell's office announced Monday that the state will use similar state- and federally funded programs to retrain Generd Motors workers who are losing jobs with next month'! closing of the Boxwood plant. The departments of Labor and Heilth and Social Services will beon site at the Boxwood plant bday to offer assistance and irformation about programs. Many Watkins, 50, of Wilmington, has been trying unsuc-cessfuly to find a job since she was lafl off by Chrysler. "Wwere under the assumption that we could get $10,000 for anything we wanted to go to schoofeor," Watkins said. Shebecame more frustrated when tie learned the only state trainiig program she qualified for wat a nurse-assistant class to work in the medical field. Watkins said after years of physical labor and working with her hands, she had hoped to continue in the manufacturing sector. But the only open jobs she's finding are ones that pay half of what she got at Chrysler and aren't suited for her skills. Vincent Camponelli, 34, of Bear, another former Chrysler employee, said he went back to school to get his MBA as soon as he learned the Newark plant was on the list for closing. And although he heard there would be money for retraining programs, he was told that he didn't qualify because he has an advanced degree. He said there has been a lot of discussion among workers about the education funds, but few answers and most of the information is gossip. "That's something that a lot of Chrysler people are mad about now," Camponelli said. Contort Ginjr Gibson at 324-2794 or gigibsonidelauHreonline.com. History proves there can be life after bankruptcy By BRIAN TUMULTY Gannett Washington Bureau WASHINGTON - Can General Motors file for bankruptcy and re-emerge from Chapter 11 as a profitable and viable automaker? Other major American companies such as Texaco, Dow Corning, Delta Airlines and United Airlines have filed for Chapter 11 reorganization and successfully exited. GM enters the process, according to bankruptcy experts, with the most important element needed for an eventual exit - an outside source of financing going forward in Uncle Sam. "What is distinctive about this situation is that the government is behind GM," said Randal Picker, a professor of commercial law at the University of Chicago Law School. GM was hesitant to file for bankruptcy, fearing no one would buy its cars, but that appears to have been overcome with the government agreeing to back its warranties, according to Picker. "I think we have gotten over the mental hurdle," he said. "They have got a have a business plan for selling cars profitably." Bankruptcy court gives a company the opportunity to reduce costs by disposing of leases, contracts, employee benefits and, in some cases, court judgments or class-action lawsuits. GM plans to cancel about 1,100 dealership agreements, sell its European operations, close more U.S. factories, and implement a new labor agreement with the United Auto Workers as part of the business plan for the new streamlined GM. Airlines such as United and Delta, which were facing competition from low-cost carriers such as Southwest, used bankruptcy reorganization to lower both their operating costs and debt. Pilots and other employees agreed to wage cuts. The federal courts do not keep statistics on how many firms emerge from Chapter 11, but Skeel said the general rule of thumb is "the bigger the company, the more likely they are to re-emerge." In addition, companies with bricks-and-mortar assets have a better chance than a Silicon Valley-type firm whose key asset is its employees, Skeel said. "As folks like to say, their most important assets walk out the door at the end of every day. And most of them don't stick around for a long bankruptcy. With GM, the assets aren't going anywhere. Those plants aren't going to run away." Companies often fail to re-emerge from bankruptcy as operating entities because of time-consuming legal disputes among the creditors, suppliers, other vendors and parties with legal claims. "You ever see two kids fight over an ice cream cone when they could have shared it, and instead it fell onto the ground?" asked bankruptcy attorney John Penn. Other firms quickly fail in bankruptcy because there's no viable long-term plan for operating profitably. One the most notable recent failures was Circuit City, which was the nation's No. 2 electronics discount retailer when it filed for bankruptcy reorganization in November with $1.1 billion in pre-arranged financing in place. The retailer instead ended up liquidating its inventory and closing all its stores. "Usually, shorter is better just because of the cost of the process in terms of the drag on the business," said Penn, a partner at the Fort Worth, Texas, law firm of Haynes and Boone LLP and a past president of the American Bankruptcy Institute. In both the GM and Chrysler bankruptcies, the so-called bad assets could remain under bankruptcy court jurisdiction for years until they are finally disposed of. Some of the most successful reorganizations have been by firms hamstrung by court judgments or class action lawsuits. GM's core business needs more than a few tweaks to become profitable, according to Penn. "You also don't want to make such radical cuts that you wipe out the business because you can cut too deeply," he said. "It's definitely an art and not a science." GM's bankruptcy among history's biggest General Motors Corp. bankruptcy filing is the fourth largest in U.S. history with more than $82 billion in assets. Largest public company filings since 1980 COMPANY DATE ASSETS Lehman Brothers Holding Inc. Sept. '08 ESZSSSISISa Washington Mutual Sept. '08 ETZEZI 327.9 WorldCom Inc. July '02 O 103.9 General Motors Corp. June '09 Q 82.29 Enron Corp. Dec. '01 O 65.5 Conseco Inc. Dec. '02 11 61.4 Chrysler LLC April '09 I 39.3 Thornburg Mortgage Inc. May '09 S 36.5 Pacific Gas and Electric Co. April '01 36.2 Texaco Inc. April '87 g 34.9 Sources General Motors, bankruptcydatacom AP For Boxwood's workers, dreaded day is here at last After years of rumors, salness and anger greet news of closing By ERIC RUTH and AARON NATHANS The News Journal For Boxwood Road au-toworkers, it's been a long up-and-down ride. Over the years, they've been hit again and again by rumors of the plant's demise. They grew accustomed to the grim predictions, the periodic shutdowns, the concessions and the last-minute salvation. But that didn't seem to make it any easier for them to swallow this news. This time, they were told Monday, it's for real.-:. "' '" "It's like getting punched in the stomach. I mean, this is a blow," said Steve Quindlen, president of the Delaware Manufacturing Extension Partnership and a retired Boxwood manager. Years of uncertainty ended in an assembly Monday morning at the 62-year-old plant, where the few hundred remaining workers discovered their jobs would be gone within a few weeks, right in the middle of the worst economic crisis in years. "Bye, GM!" workers shouted as they left Monday afternoon. For some, the news prompted some miffed wheel-squealing as they raced out of the plant and away from a thicket of media. For others, the emotion prompted a few tears, and some angry words - for the union they believe failed them; for the employer that ultimately seemed not to value them; for the foreign-car-buying Americans they believe betrayed them. "I've been here 30 years. We need to keep these jobs in this country for our children and grandchildren," said worker Elaine Hyland. Older workers said they felt secure, with their pensions and benefits apparently intact for the time being. They fretted over the fate of workers with just a few years in, with no formal training to fall back on. "I wonder, too, if this doesn't work out the way the elite want it to. ... What happens in a year or two from now?" said retiree Doug Hanscom. "If they're still in financial straits, they will come after my pension." Dean Bunge Sr. said he had heard the shutdown talk year after year. Every time, someone would save the day, and Bunge, who worked in the auto-body section, would soldier on. But last year, amid the growing economic downturn, Bunge said, he began to take the talk more seriously. In Wi W ft : The News JournalFRED COMECYS Assnbly workers at GM's Boxwood Road plant leave via the main gate at tit end of their shift Monday afternoon. The ace of autoworker Elaine Hy-landtells of her strong emotions abort the closing of Delaware's GM ilant where she has worked for D years. Jure, he took a buyout. 'You just didn't need the anxety of all this stuff going on,' said Bunge, who stopped at Aigelo's Luncheonette in Wimington on Monday. "I kinia halfway expected it, but I dim't want to see it." lunge said GM made mistake, including failing to ad-verise that its workmanship hadbecome more competitive. He aid the closing of the plant was emblematic of the Ameri-caneconomy in general. t)ur society now is almost entrely based on non-value-adoM work," Bunge said. "We neel to create jobs in our coun-trywhere we are producing products instead of paper-wok." Junge, 62, said his son, Dem Jr., had considered woking at the plant, but he woildn't hear of it. The reason he doesn't wok at GM was because there wa; no way he was going to get a j(b at GM and be able to re-tin at GM," he said. "The haidwriting was on the wall." iome workers contend that theUnited Auto Workers union gottoo cozy with GM, and made toomany concessions over the years. At the same time, others lanented the loss of a solid woking partnership between labor and management that helped the plant stay strong and brought positive things to the community. Others suspect that a little management-worker friction would have ultimately done workers more good. "The company and the union got along great up there. Maybe too great," Hanscom said. There's hope that some workers can still snag a transfer to a plant that's staying open - faint hope. "That's always an option," said worker John Joswick. "But these other plants can only take so many employees." "It's sad that it's come to this point," Quindlen said. "They were a very giving organization - the people, its management, the whole thing. "But life goes on, and we now need to do everything we can for these people to find opportunities, find jobs," he said. Marcy Watkins, 50, a former Chrysler plant worker, said word about the Boxwood Road plant made her angry all over again. "I'm angry to see people who I know who are going to be struggling," Watkins said. "I've watched grown men cry. We're going to lose homes and kids can't go to college. It's just bad." v Her only advice for her GM colleagues is to pray. "I hate to tell someone it's doom and gloom but that's what's happening," she said. "There are no jobs here to match what these people need to live off of." Staff reporter Ginger Gibson contributed lo (his story. Contact Eric Ruth al 324-2428 or eruthdclouoreonlinf.com. Contact Aaron Nathans at 324-2786 or aratharu (tfoWawareonline.com. Locals upset by news, some worry about pensions Plant and company considered icons for many in neighborhood By AARON NATHANS The News Journal All over the greater Wilmington area on Monday, residents grudgingly accepted what they secretly knew was an inevitability - a great American corporate symbol had finally fallen, with part of the blow falling in their backyard. Irma Barr-Heibeck said she grew up in the Bestfield neighborhood near the General Motors plant on Boxwood Road. "It's always been a kind of GM neighborhood. You'd always see the men walking to work," she said. The plant, and company, were icons, she said. "I feel sorry for all the people who devoted their lives to it." Kara Briggs, sitting at the counter Monday at Angelo's Luncheonette, called herself a child of the plant. She said her father retired from the factory this year after more than 30 years. She recalled that in the late 1980s, when she was in seventh grade, he sat the family down and said there was a good chance the plant would be closing. He said they could move to Tennessee, where the Saturn brand was ramping up. Ultimately, she said, they stayed and hoped he would be able to work until he could collect his pension. He made it, but the family worried Monday about whether pensions would survive the General Motors bankruptcy. "You put in that many years for a company you believe in, and they turn around and treat you unfairly," said Briggs, of Forty Acres. Government and GM officials reiterated Monday that the pensions are safe. William Holland, of New Castle, said he worked at the plant for 17 years, retir-ty? in 1987. 1 lolland, 62, said he's waiting until he's 65 to start etting his $400-a-month pension. "If I don't get it, it'l make it rough" said Holland, standirg outside Steve's Discount Liquors, cross the street from the plant. The owner of the sbre, Bob Nedwick, said he's watched thenumber of cars in the employee parking lot dwindle over the years. Nedwick vorked for his father when it opened ii 1955. Business may not Id as good, he said, but he remains confident it would make it after the plant closet. Nedwick said he'sbought GM products for years, and currently drives a 2004 Buick Le Sabre. , "Let me put it thisivay: Older people like Buicks," he said. Richard Lanyon, vho retired from the plant in 2007 afte 37 years, said he was upset about his brmer co-workers losing jobs. He said :he corporation's bankruptcy should na deter people from TAVI'. '-J I The News JoumWROBERT CRAIG Bob Nedwick, who owns Steve's Discount Liquors, across from GM's Boxwood Road plant believes his business will be OK after the plant closes. He's bought GM vehicles for years, and currently drives a Buick Le Sabre. buying GM vehicles, and he believes GM will rebound within several years. "They should have went smaller faster," Lanyon said. "It belongs to the taxpayers now. Buy American if you can." Contai t Aaron Nathans at 324-27$b flnatfianj.iffdi'lau'un'onlinp.com. A. . " ('RKWOOD HWY. Canwr GM plant near Newport S) j it The News Journal As GM plant closes, doors open for new development By ERIC RUTH The News Journal The closing of the 62-year-old General Motors plant near Newport is a big dose of bad news for Delaware, but it could bring new opportunities. That's the lesson learned by U.S. communities that worked to quickly redevelop plant properties into projects that brought their own economic benefits. In Farmington Hills, Mich., a developer plans to use a shuttered plant property for housing and industry. In downtown Detroit, GM is working with the city to transform one site into a mixed-use riverfront center similar to Wilmington's. In Van Nuys, Calif., an old Chevy plant was transformed into 35 stores and restaurants. Because it's located in a part of New Castle County that boasts precious little open space, the Boxwood Road plant offers a rare opportunity to carry out a large, coordinated project that addresses community needs. "Many of the sites are very well-located across the country, said Nancey Green Leigh, professor of city and regional planning at the Georgia Institute of Technology, who has studied closed plant property' sales. "They were originally built in what were the far suburbs, but over time, the cities have grown." Others worry that the GM site's suburban location could make it less attractive to developers. "Boxwood will be a different venue, and probably a more difficult sell, just because the way it's landlocked," said Alan Levin, director of Delaware's Economic Development Office, in comparing the site to Chrysler's closed Newark assembly plant "There's no frontage there to speak of." Levin said the state has talked with companies - including automakers - about using the GM site, although he didn't offer specifics. He said the state would watch GM's effort to sell its Saturn division, and look to market the factory to Saturn's buyer. "Our first goal would be to use it for what it is today," Levin said. As governor in the 1990s, Sen. Tom Carper commissioned a task force to explore uses for the Boxwood Road site after GM announced its intention to close the plant. GM reversed its decision, but the task force report is probably "on a shelf in state government," he said. Nationwide, few closed auto plants are repurposed for another big industry, partly because of the task-specific layouts of the assembly plants and their enormity, experts said. Aged auto plants also have significant cleanup challenges. In some cases, workers are needed to disassemble machinery and demolish buildings, tasks that can provide jobs for the workers who have been laid off. In Doraville, Ga., Georgia Institute of Technology researchers examined what could - and should - be done with the closed GM plant there. "It was an opportunity to try and take this site and reweave it back into the community," said Leigh, the study's leader. It was clear there was faint hope of finding a new industrial tenant for the entire plant, she said, and city officials were leery of putting all their economic eggs in one basket again. In Newark, the next chapter could be ready to unfold for the now-closed Chrysler plant. The University of Delaware wants to buy the property for use as a biotechnology center, and negotiations between the university and Chrysler are ongoing, said David L. Brond, vice president for communications and marketing at UD. "We're out of space in the current biotech park, and with a lot of the partnerships we're forging ... that is what a dominant portion of that space would be used for," Brond said. The university sees the property as a place to expand its focus on health care training and research, as well as alternative energy research. Newark Mayor Vance Funk III said he has endured many "false alarms" about a deal to sell the Chrysler plant in recent weeks and "it's just beyond frustration at this point." Staf writer Andrew Eder contributed to this Gory. Contort fc'rir ftulh at 324 2428 or fruthifi'iiflawimmhne.com.

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