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CAMPBELL Cold Metal denies deceiving county



Published: Fri, September 20, 2002 @ 12:00 a.m.



A company official said accusations that the company accepted a grant knowing its plant would close are nonsense.

By BOB JACKSON

VINDICATOR COURTHOUSE REPORTER

YOUNGSTOWN -- An official at Cold Metal Products says Mahoning County officials are off-base for suggesting that the company pulled the wool over the county's eyes.

"We don't do our business that way," said E. Duane Wykoff, vice president of human resources and communication.

Commissioner David Ludt and Auditor George Tablack questioned whether the company knew it was going to shut down its Campbell plant when it accepted a $165,000 economic development grant from the county last year.

"I'm concerned about that," Ludt said. "I want an investigation and I want our money back."

The money was part of an economic development incentive package intended to help the company revitalize the Campbell plant with more modern equipment and a waste water treatment plant. The Ohio Department of Development had also pledged money to help.

Assurance

Ludt said that before commissioners approved the grant in October 2001, company officials assured him that Cold Metal could continue to operate in Campbell for at least three years. Cold Metal also pledged to retain 113 jobs and add 22 at the plant.

Its agreement with the county says that if Cold Metal does not maintain its business location within the county, the company will be obligated to repay the money.

Last month, the company filed for bankruptcy protection and shut down its facilities in Campbell and Indianapolis.

Ludt and Tablack said company officials should have known in October, before the grant was awarded, that the Campbell plant would be closed soon.

"If we did all that and they knew all along that they were shutting down, then I think there's fraud there and it should be checked into," Ludt said.

Tablack said he's asked Prosecutor Paul Gains to probe the matter further.

Company's response

Wykoff said there's no wrongdoing by the company. The two plants were shut down because they weren't making money, he said.

"We never took that money under any kind of false pretense," Wykoff said. "The whole idea that we took that money knowing we would close is absolute nonsense."

He said the company accepted the grant with the sole intention of making the plant viable.

Campbell Mayor Jack Dill said the investment was worthwhile because it was used for equipment that's helped alleviate a flooding problem at the plant. That, in turn, will make the facility more attractive for sale to someone else.

Employee buyout

He said a group of former Cold Metal employees are negotiating to buy the plant and run it themselves.

"We're sure that we can do this," said former employee Dave Zavarello. "We have the experience to do it."

He encouraged commissioners to pursue the company through bankruptcy court to get the county's money back.

Commissioner Ed Reese said commissioners will do all they can to recover the money, but "the bottom line for me is that we don't do anything to jeopardize that employee buyout."

Cold Metal received court approval Tuesday for financing of up to $48 million to continue some operations -- none in Campbell -- as it tries to reorganize. The money will come from a group of lenders led by GMAC.

bjackson@vindy.com




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