COLD METAL PRODUCTS Workers get grant for ESOP
Cold Metal workers are moving quickly toward a buyout so they can keep customers.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
CAMPBELL -- Former workers at Cold Metal Products are optimistic they will be able to buy the company's closed Campbell plant after receiving a $15,000 grant to hire a consultant.
"We really believe we can make this go," said Dave Zavarello, a committeeman with United Steelworkers of America Local 3047.
The union received the state grant after meeting with officials from the Ohio Employee Ownership Center at Kent State University.
Impressed with knowledge
Steve Clem, the center's project coordinator, wouldn't predict the likelihood of the union forming an employee stock ownership plan, but he said officials were impressed enough with the union to approve the grant for a feasibility study.
Workers demonstrated they knew the plant and its steel-processing operation, he said.
With 116 jobs at stake, the state thinks an employee buyout should at least be investigated, he said. Without an ESOP, the workers may be forced to take low-wage jobs at fast-food restaurants, he said.
The first step is selecting a consultant to conduct the feasibility study. Union officials are interviewing consultants and expect to choose one within a week. A report from the consultant should take anywhere from two to eight weeks, Zavarello said.
He said the union is trying to move quickly so the plant could keep its customers if operations are restarted.
Hinges on report
Clem said the consultant's report will determine whether the union will be able to continue working toward an ESOP. The report will examine the plant, the market for its products, the plant's financial success, and the possibility of joining with an investor.
If the report is positive, the union will have to look for either an investor or a financial institution to provide a loan.
In an ESOP, workers would receive stock in the company, which would function as their pension plan as the company goes forward.
Even with the work on the ESOP, the best option for the plant is if another company buys it from Cold Metal, Zavarello said.
Former workers are conducting a 24-hour-a-day vigil outside the plant to make sure nothing is removed. The union wants plant equipment left in the plant in case it is restarted.
Cold Metal filed for bankruptcy protection last month, one day after closing the plant. The cash-strapped company also closed a plant in Indianapolis but is maintaining plants in Ottawa, Ohio; Roseville, Mich.; and Canada.
The company, which moved its headquarters from Boardman to Sewickley, Pa., in 2000, also has an administrative office on South Avenue.