The founder of the local manufacturer says he is 'terribly disturbed' by the closing.
By DON SHILLING
and STEPHEN SIFF
VINDICATOR STAFF WRITERS
HOWLAND -- Many are wondering why a New York investment company shut down Ajax Magnethermic Corp., a longtime local company.
"There was still enough work. The sales were there," said Mike Smith, an electrical engineer who was laid off in May.
The Liberty resident said business for the industrial equipment maker was slow after Sept. 11 but had been picking up.
About 145 workers lost their jobs Friday when the company's headquarters closed. A sign on the doors said it would remain closed until further notice.
"All the employees are wondering what's going on," Smith said.
Employees aren't the only ones. John Logan of Canfield, who formed Magnethermic Corp. in 1948, said he is "terribly disturbed" by the closing.
After forming Magnethermic with two partners, he acquired New Jersey-based Ajax 10 years later and combined the operations. Ajax traced its history back to 1916.
Logan, who attends retirees meetings monthly, said the current owners didn't seem to take actions needed to save the company.
"I hate to see it go. It's always been a profitable business," he said.
Logan and his partners sold the company to Guthrie Corp. of England in 1975 and he remained with the company for awhile before retiring.
A few years ago, Citicorp Venture Capital of New York bought the company, which makes equipment that is used in the heating of metal so it can be shaped.
A Citicorp spokeswoman said she would try to find someone to comment on the plant closing.
Workers' lawyer surprised
Marc Dann, a local lawyer who is representing laid-off employees seeking severance benefits, said he was surprised by the closing because lawyers for banks who deal with Citicorp Venture Capital told him last week that efforts were continuing to sell the company.
He said he thought a sale would be completed because the company had an operating profit and considerable value because of its 86 years of experience.
Despite making money, the company was weighed down by debt payments that were created when Citigroup Venture Capital bought the company, Dann said.
"They paid way too much for it," he said.
The closing of Ajax Magnethermic is a case of poor decisions by investment bankers, he said.
"This company, which people spent all these years to build, was the victim," he said.
While the company's headquarters had remained here, it moved all of its production to Kentucky in 1983. About 300 jobs were lost then.
The company earlier this year said it was going to relocate production from Kentucky to Howland and create 40 to 50 jobs here. It received the tax abatement in April, but in May it laid off 65 workers from its headquarters.
Local officials say they don't know how they could have prevented the company's closure.
"We called when they started with downsizing and they never returned our call," said Darlene St. George, Howland Township administrator. "I don't know there is anything we can offer."
Trumbull County Commissioner Joseph J. Angelo Jr. said the plant closing demonstrated the importance and need for commissioners to help companies out with tax breaks and incentives for expansion.
"I think the economy is the worst it has been in a long time," Angelo said.