[Newspaper]
Publication: The Globe and Mail
Toronto, Ontario, Canada
vol. 142, no. 42245, p. B2, col. 1-4
Workers’ plan to reopen plant
fails as plant sold to U.S. firm
By MARTIN
MITTELSTAEDT
An innovative scheme by a group of laid-off workers to reopen a Hamilton factory and run it as a co-operative failed after the receiver for the Royal Bank of Canada sold the operation to a U.S. company.
Canadian Porcelain closed in December after 72 years in business, throwing about 100 people out of work. The co-operative plan had wide support from community and church groups in Hamilton.
But the receiver, Peat Marwick Ltd. of Toronto, accepted an offer from Lapp Insulator, a company based in New York. The federal Government found earlier this year that Lapp dumped electrical products into Canada, unfair competition in the electrical insulator market that helped drive Canadian Porcelain out of business.
A group of about 35 laid-off workers demonstrated outside the main Toronto office of the Royal Bank yesterday complaining that the receiver failed to give them a fair chance to buy the operation. The workers were in the process of submitting an offer.
"We really would like a chance to have a co-operative. We believe we could run it (the factory) better than anyone else,” said Bill Thompson, recording secretary for the union representing workers at the plant and a backer of the cooperative scheme.
Canadian Porcelain’s troubles began when the recession hit in 1982, but they intensified because of the cutthroat competition from Japanese and U.S. electrical manufacturers. After the sale of inventory, the Royal Bank was still owed about $2-million following the closing.
Representatives of Peat Marwick and the co-operative negotiated last week on a deal to reopen the plant but the offer of $1.1-million was rejected as too low.
On Friday, the receiver said it had accepted Lapp’s bid, and on Saturday, the workers voted to raise their offer to $1.3-million.
Mr. Thompson said the workers were not aware that another offer was submitted, and wondered why the receiver for the bank did not try to set up competitive bidding for the company. Terms of the Lapp offer have not been disclosed.
Officials from Local 249 of the Aluminium, Brick and Glass Workers International Union, which represents the workers, want to meet Lapp officials to discuss the company's plans for Canadian Porcelain, Mr. Thompson said.
He said there are fears that Lapp intends to run the operation mainly as an assembly and distribution plant and that employment levels would drop below the 65 people who would have had jobs in the co-operative.
An official at the Royal Bank said the union will view the sale more positively when it discusses the deal with Lapp, but Henry Shewfeld, a manager of commercial lending, would not say why competitive bidding was not encouraged between the two interested buyers.