Beloit workers anxious about sale

January 07, 2000

By Greg Sukiennik, Berkshire Eagle Staff

LENOX -- A payroll snafu that was blamed locally on Y2K problems has apparently been resolved at Beloit Corp.'s Crystal Street, Lenox Dale, plant. But that isn't soothing the concerns of the plant's 185 employees, who are uneasy about what will happen to the facility when Beloit is sold, as a whole or in pieces, to the highest bidder.

That auction process began last night, when parent company Harnischfeger Industries announced the "stalking horse" bidders for the auction of Beloit's assets. The stalking horses -- the potential buyers who had the first opportunity to review the company's books -- will set the baseline bids, and will participate with other qualified bidders in an auction next Monday.

The stalking horse for Lenox Dale, which is part of the Beloit's pulp and finishing division, was Groupe Laperriere & Verreault Inc. of Trois Rivieres, Quebec, Canada. The company's pulp and paper division is headquartered in Lawrenceville, Ga..

Harnischfeger is selling Beloit to the highest bidders at auction. The U.S Bankruptcy Court in Wilmington, Del., is scheduled to review the auction results on Jan. 19.

~snip~ The payroll problem, which sources in Nashua, N.H., confirmed also sprang up there, affected hourly workers who receive their paychecks by direct deposit.

In a letter posted Wednesday within the Lenox plant, management explained that "Due to Y2K, a new payroll system was implemented on Jan. 3, 2000. Beloit Corp. is experiencing technical difficulties in running its hourly payroll. This is going to cause all checks in automatic deposit scheduled for Friday, Jan. 7, 2000, to be late." The letter concluded, "Unfortunately, at this point in time, we cannot say exactly when the problem will be fixed," adding that employees would be notified as soon as the problem was solved.

However, Robert Dangremond, chief restructuring officer for Harnischfeger, said yesterday that the problems were not Y2K related, but due to payroll data being submitted late.

Yesterday, Lenox plant general manager Michael McKenney confirmed that the problem had been resolved, and that paychecks for hourly employees had arrived.

But workers, speaking on condition of anonymity, had already expressed their doubts about the situation, and their fears about what will happen to the Lenox plant when bids for Beloit are finalized. "About half think the plant is going to stay open, and half think we're going to be closed," one said.

While some workers think the Lenox plan's relatively inexpensive rates will make it attractive to new owners, others worry that anyone big enough to buy the plant is already making money off its own finishing and repair operations.

McKenney said that there are bids for the finishing end of Beloit's business, which includes the Lenox parts and repair facility. "There are people who see the value in our business," he said. "We're optimistic about the people who have gone through the [bidding] process here."

Asked who the bidders are, McKenney said he could not reveal their identities. Earlier in the day, Metso, a Finnish publicly traded company, confirmed that its Valmet division had bid about $160 million for Beloit's roll cover division, paper machine after-market assets and the technology related to those businesses.

Later, it was announced that Metso had acquired the stalking horse bid for the paper aftermarket and roll covers division.

But McKenney also said that employees, including himself, were anxious to see the bidding process concluded and quickly, so that the Lenox plant can move ahead.

~snip~

And until the paychecks came in yesterday, some workers said they didn't believe the Y2K explanation, and instead suspected Beloit had at last run out of money.

Harnischfeger has been under Chapter 11 bankruptcy protection since last June, when it posted losses of more than $90 million in six months, and Beloit's remaining manufacturing plants in Wisconsin and Illinois have seen layoffs recently. Last year, Beloit closed its Jones plant in Dalton, putting about 270 people out of work.

The other stalking horse bids are: Woodyard division: Andritz AG; OASIS division: Alignment Services of North America; paper technology division: Mitsubishi Industries (which owns a 20 percent stake in Harnischfeger).

The Daily Nonpareil, archives #116, Council Bluffs, Berkshire County, Iowa

http://www.newschoice.com/newspapers/midstates/nonpareil/

-- Lee Maloney (leemaloney@hotmail.com), January 23, 2000