Anyone have an extra $2,000,000?
Posted by
Matt Shaver
on 2002-06-02 18:28:03 UTC
I really don't intend for this to start an off-topic thread, but I do think
it's worth some quiet, individual contemplation...
http://www.southbendtribune.com/stories/2002/05/31/local.20020531-sbt-MARS-A1-Plant_shut.sto
Plant shut down
South Bend Lathe evicted over rent, taxes
By KEITH BENMAN
Tribune Staff Writer
SOUTH BEND -- A 94-year-old company that was once the world's leading maker
of precision lathes was abruptly put out of business Thursday.
South Bend Lathe Corp. was evicted from its plant at 400 W. Sample St. about
9 a.m.
Management told workers to leave when two St. Joseph County police officers
showed up with an eviction order and the landlord's lawyer.
The company had fallen behind on almost $100,000 in rent and taxes, according
to Robert Mysliwiec, a lawyer representing landlord ARG Corp. and Norbert
Toubes.
Company officials acknowledged Thursday afternoon they have been having
financial difficulties. The company has been in continuing negotiations with
ARG, its bank and other creditors since last year, according to Carmine
Martino, company vice president. But he still feels the company can work its
way out of its current problems.
"We want to see what we can do to resolve this and we want to go back and
open up," Martino said. "We hope we can be here for 100 more years."
Late Thursday, a lawyer for the company said the eviction notice would be
contested at a 2 p.m. court hearing today.
However, workers packing up their tools at the plant Thursday morning seemed
less hopeful than Martino about the situation.
"They (management) just let this drag on so long and now this happens," said
Jack Knepp, of Bremen, who has worked for South Bend Lathe for 27 years. "But
I don't have any regrets. I made a lot of friends here. It's just a shame to
see it go."
The company has a long history in South Bend. It was founded by twin brothers
John and Miles O'Brien in 1908. It eventually became the world's leading
maker of precision lathes employing as many as 900.
However, it has faced continuing difficulties since the 1970s, when
foreign-produced lathes started challenging the company's dominant position.
In 1992, a 17-year employee stock ownership plan ended and the company
entered Chapter 11 bankruptcy. It emerged a year later but employment was
down to 82.
Employment was still at about that level last year but dropped to about 35
recently. Those 35 were laid off Friday. Then this week they were recalled.
The building's landlord sought the eviction because the company was behind
some $16,666 in rent and at least $73,341 in taxes, according to Mysliwiec.
He said the lease agreement required South Bend Lathe to keep taxes paid.
SBL history
South Bend Lathe grew from a two-man operation on East Madison Street in
South Bend to become a world leader in the production of precision lathes.
1908: Twin brothers John and Miles O'Brien start South Bend Lathe Works on
East Madison Street.
1930: The company employs 475 and is producing almost one-half the lathes
made in U.S.
World War II: The company wins the U.S. Navy's prestigious "E" pennant for
its key role in war-time production. Employment peaks at about 900.
1959: American Steel, later known as Amsted Industries, of Chicago, buys
South Bend Lathe.
1965: Production is moved to a former Studebaker plant at 400 W. Sample St.,
the company's current location.
1975: Amsted Industries threatens to close the company down. About 500
employees purchase the company under an Employee Stock Ownership Plan.
Aug. 25, 1980: Company gains nationwide attention when the ESOP goes sour and
employees represented by United Steelworkers strike the plant over wages and
pensions.
1992: South Bend Lathe goes into Chapter 11 bankruptcy and the ESOP ends.
Employment is down to around 80.
1993: A group led by Norbert Toubes buys South Bend Lathe and it emerges from
bankruptcy.
November 1999: Niles businessman John Derda and Ty Putrich buy South Bend
Lathe with the help of a $680,000 loan from the city of South Bend's
Industrial Revolving Loan Fund.
May 1, 2001: Derda sells his interest in South Bend Lathe to company
President Putrich and Vice President Carmine Martino.
"I'm hopeful someone will buy the building and the people will get their jobs
back," Mysliwiec said.
However, he noted that Bank One, the company's biggest creditor, will
probably have the ultimate say in what becomes of the company.
Bank One is threatening to foreclose on $2.1 million the company owes the
bank, according to Martino, of South Bend Lathe. However, discussions between
company officials and the bank were continuing Thursday afternoon.
Martino said his company has about $2 million in orders and could eventually
pay off the debt.
The lawyer representing Bank One could not be reached for comment.
Police officers serving the eviction notice allowed workers to pick up their
tools during the morning.
Ron Deka, 52, a union shop steward for the United Steelworkers of America,
came to pick up his tools about 10 a.m.
When Deka turned on the lights in the darkened shop, it revealed rows and
rows of drill presses, lathes and heavy machinery. The building encompasses
500,000 square feet altogether.
"We were a booming business at one time," Deka said. "There's very few
American companies that make these anymore. A lot just buy imports and sell
those."
The company's lathes are used to form metal pieces into parts for machines
and other uses.
South Bend Lathe's top two products are a 10-inch lathe and rubber roll
grinders. The lathes are bought by government, airlines, truck companies and
schools. The rubber roll grinders are used by newspapers, paper manufacturers
and makers of abrasive machines.
Average wages are about $13 or $14 an hour.
Ty Putrich, company president and owner, had informed the union the company
was having difficulties, according to Deka. But Deka seemed surprised when a
reporter told him how much the company might owe creditors. He said business
had dropped off a lot in the last two years.
But the fame of the company has lasted to the present day, especially locally.
"I wish I had a nickel for every guy that has told me, 'My dad or my granddad
has got one of your lathes in his basement or garage,'" Deka said.
South Bend Lathe lies within the Studebaker Corridor, where industrial giants
Studebaker Corp. and Oliver Plow Works once employed thousands. The lathe
company moved there in 1965, after Studebaker went out of business.
The city has been trying to acquire properties in the corridor in order to
demolish them and redevelop the area.
However, Thursday's eviction at South Bend Lathe was bad news, according to
Ann Kolata, a senior redevelopment specialist with the city's Department of
Community and Economic Development.
"It's a setback for South Bend in that it's a long-term business that's been
here and we obviously would want to see the business continue and the jobs
remain."
In recent months, the city had talked to both company officials and the
landlord about acquiring the South Bend Lathe plant and moving the business,
according to Kolata.
She didn't know how Thursday's developments would affect those plans.
it's worth some quiet, individual contemplation...
http://www.southbendtribune.com/stories/2002/05/31/local.20020531-sbt-MARS-A1-Plant_shut.sto
Plant shut down
South Bend Lathe evicted over rent, taxes
By KEITH BENMAN
Tribune Staff Writer
SOUTH BEND -- A 94-year-old company that was once the world's leading maker
of precision lathes was abruptly put out of business Thursday.
South Bend Lathe Corp. was evicted from its plant at 400 W. Sample St. about
9 a.m.
Management told workers to leave when two St. Joseph County police officers
showed up with an eviction order and the landlord's lawyer.
The company had fallen behind on almost $100,000 in rent and taxes, according
to Robert Mysliwiec, a lawyer representing landlord ARG Corp. and Norbert
Toubes.
Company officials acknowledged Thursday afternoon they have been having
financial difficulties. The company has been in continuing negotiations with
ARG, its bank and other creditors since last year, according to Carmine
Martino, company vice president. But he still feels the company can work its
way out of its current problems.
"We want to see what we can do to resolve this and we want to go back and
open up," Martino said. "We hope we can be here for 100 more years."
Late Thursday, a lawyer for the company said the eviction notice would be
contested at a 2 p.m. court hearing today.
However, workers packing up their tools at the plant Thursday morning seemed
less hopeful than Martino about the situation.
"They (management) just let this drag on so long and now this happens," said
Jack Knepp, of Bremen, who has worked for South Bend Lathe for 27 years. "But
I don't have any regrets. I made a lot of friends here. It's just a shame to
see it go."
The company has a long history in South Bend. It was founded by twin brothers
John and Miles O'Brien in 1908. It eventually became the world's leading
maker of precision lathes employing as many as 900.
However, it has faced continuing difficulties since the 1970s, when
foreign-produced lathes started challenging the company's dominant position.
In 1992, a 17-year employee stock ownership plan ended and the company
entered Chapter 11 bankruptcy. It emerged a year later but employment was
down to 82.
Employment was still at about that level last year but dropped to about 35
recently. Those 35 were laid off Friday. Then this week they were recalled.
The building's landlord sought the eviction because the company was behind
some $16,666 in rent and at least $73,341 in taxes, according to Mysliwiec.
He said the lease agreement required South Bend Lathe to keep taxes paid.
SBL history
South Bend Lathe grew from a two-man operation on East Madison Street in
South Bend to become a world leader in the production of precision lathes.
1908: Twin brothers John and Miles O'Brien start South Bend Lathe Works on
East Madison Street.
1930: The company employs 475 and is producing almost one-half the lathes
made in U.S.
World War II: The company wins the U.S. Navy's prestigious "E" pennant for
its key role in war-time production. Employment peaks at about 900.
1959: American Steel, later known as Amsted Industries, of Chicago, buys
South Bend Lathe.
1965: Production is moved to a former Studebaker plant at 400 W. Sample St.,
the company's current location.
1975: Amsted Industries threatens to close the company down. About 500
employees purchase the company under an Employee Stock Ownership Plan.
Aug. 25, 1980: Company gains nationwide attention when the ESOP goes sour and
employees represented by United Steelworkers strike the plant over wages and
pensions.
1992: South Bend Lathe goes into Chapter 11 bankruptcy and the ESOP ends.
Employment is down to around 80.
1993: A group led by Norbert Toubes buys South Bend Lathe and it emerges from
bankruptcy.
November 1999: Niles businessman John Derda and Ty Putrich buy South Bend
Lathe with the help of a $680,000 loan from the city of South Bend's
Industrial Revolving Loan Fund.
May 1, 2001: Derda sells his interest in South Bend Lathe to company
President Putrich and Vice President Carmine Martino.
"I'm hopeful someone will buy the building and the people will get their jobs
back," Mysliwiec said.
However, he noted that Bank One, the company's biggest creditor, will
probably have the ultimate say in what becomes of the company.
Bank One is threatening to foreclose on $2.1 million the company owes the
bank, according to Martino, of South Bend Lathe. However, discussions between
company officials and the bank were continuing Thursday afternoon.
Martino said his company has about $2 million in orders and could eventually
pay off the debt.
The lawyer representing Bank One could not be reached for comment.
Police officers serving the eviction notice allowed workers to pick up their
tools during the morning.
Ron Deka, 52, a union shop steward for the United Steelworkers of America,
came to pick up his tools about 10 a.m.
When Deka turned on the lights in the darkened shop, it revealed rows and
rows of drill presses, lathes and heavy machinery. The building encompasses
500,000 square feet altogether.
"We were a booming business at one time," Deka said. "There's very few
American companies that make these anymore. A lot just buy imports and sell
those."
The company's lathes are used to form metal pieces into parts for machines
and other uses.
South Bend Lathe's top two products are a 10-inch lathe and rubber roll
grinders. The lathes are bought by government, airlines, truck companies and
schools. The rubber roll grinders are used by newspapers, paper manufacturers
and makers of abrasive machines.
Average wages are about $13 or $14 an hour.
Ty Putrich, company president and owner, had informed the union the company
was having difficulties, according to Deka. But Deka seemed surprised when a
reporter told him how much the company might owe creditors. He said business
had dropped off a lot in the last two years.
But the fame of the company has lasted to the present day, especially locally.
"I wish I had a nickel for every guy that has told me, 'My dad or my granddad
has got one of your lathes in his basement or garage,'" Deka said.
South Bend Lathe lies within the Studebaker Corridor, where industrial giants
Studebaker Corp. and Oliver Plow Works once employed thousands. The lathe
company moved there in 1965, after Studebaker went out of business.
The city has been trying to acquire properties in the corridor in order to
demolish them and redevelop the area.
However, Thursday's eviction at South Bend Lathe was bad news, according to
Ann Kolata, a senior redevelopment specialist with the city's Department of
Community and Economic Development.
"It's a setback for South Bend in that it's a long-term business that's been
here and we obviously would want to see the business continue and the jobs
remain."
In recent months, the city had talked to both company officials and the
landlord about acquiring the South Bend Lathe plant and moving the business,
according to Kolata.
She didn't know how Thursday's developments would affect those plans.