TAUNTON, Mass.—Esterline Technologies Corp.'s Haskon Aerospace factory in Taunton shut its doors Oct. 26, but workers there aren't yet ready to give up the operation for dead.
Besides ongoing negotiations on a severance package, the union representing the hourly workers at the factory is investigating several avenues to keep the facility open. Those efforts range from searching for investors to aid the employees in purchasing the equipment and setting up a company to make the aircraft seals that were produced in Taunton, to having the local City Council seize the plant's equipment by eminent domain.
“Right after the company gave notice that it would close the operation, we told them (the workers) would like the opportunity to keep the equipment in the shop,” said Peter Knowlton, president of the Northeast Division of the United Electrical, Radio and Machine Workers of America. UE Local 204 represents the roughly 85 hourly workers who previously were employed at the Haskon unit.
He said the company never gave the union a “warm feeling” about the proposal. “They were noncommittal,” Knowl- ton said. “The impression we got was they thought we were out of our league and not serious.”
For their part, Esterline officials said the workers' group is welcome to bid on the equipment during a global webcast auction that Heritage Global Partners is scheduled to conduct on Dec. 14, according to James Sweeney, chief operating officer of Brea, Calif.-based Kirkhill-TA Co., of which Haskon was a division.
“It's an open market situation,” he said. “Anyone who has financial backing is welcome to participate.”
The 96,000-sq.-ft. Taunton factory, which Haskon is leasing, has operated for more than 80 years and is in need of much repair, Sweeney said.
Former owners of the facility included BTR Dunlop and General Electric Co., which ran a plastics division there that at one time employed more than 800. The plant has been operating under the Esterline umbrella since 2002 when Esterline acquired Burke Industries Inc.'s Engineered Polymers Group, which included the Haskon business. Burke had filed for Chapter 11 bankruptcy protection in 2001.
Knowlton said the work force is highly experienced, albeit in a split manner. About 25 employees have more than 32 years of experience in the business, while the other 60 have 15 or less, having been hired since a prior bankruptcy in the mid-1990s.
Sweeney said the condition of the building was one of the factors the company weighed when announcing late last year that it would close the Taunton unit and consolidate the silicone-based aerospace seal manufacturing at the Kirkhill-TA plant in Brea. He said the Taunton building would take several million dollars worth of updates, pointing to such issues as a leaking roof and problems with the plumbing and electrical systems.
“It's just an old facility and over the years it's gotten run down,” he said. “It gets to a point where it just doesn't make economical sense (to do the repairs).”
Despite the impression given by Bellevue, Wash.-based Esterline officials, Knowlton maintained that the workers have been serious from the start about keeping the plant in business. Right after receiving the closure notice, he said union officials contacted state agencies to discuss ways to keep the shop open.
The union also contracted with Brookline, Mass.-based ICA Group—a consulting firm that specializes in aiding worker-owned and community-based businesses—to conduct a feasibility study.
“We knew the reputation the operation had over the last five decades,” Knowlton said. “Our intuition was there was no reason it couldn't operate on its own. We wanted to make sure of that with the study.”
The ICA study had three recommendations that the UE claimed bolstered its hope that the Haskon business could be viable as a stand-alone business.
The first option, according to Knowlton, would be to set up the business as either a subcontractor or a minority-owned subsidiary of Esterline. The thought behind that suggestion was that the federal government—a customer of aircraft seal makers—sets aside 25-30 percent of federal contracts for small businesses.
“It's a market Haskon alone could capture that Esterline couldn't,” the UE official said.
The second recommendation was that a buyer—either domestic or foreign—be sought for the Haskon business.
Knowlton said Esterline rejected the first two options outright.
The final suggestion from ICA was to set up the business as an employee stock ownership program—or ESOP—and pursue purchasing the equipment. The only movement on this front, he said, was Esterline saying that the workers' group was free to bid on the equipment.
“We told them we were not interested in being treated like any other bidder,” Knowlton said. “We wanted to buy all of the equipment.”
That led to the UE seeking the help of City Council, proposing the city purchase the equipment by eminent domain. The issue has been discussed at two council meetings so far.
At the Nov. 23 session, Knowlton said the union made a brief presentation on an appraisal they had contracted for of the presses and equipment. The appraisal, however, won't be finalized until the next council meeting, scheduled for Nov. 30.
Knowlton said the council did pass a resolution calling on Esterline and Heritage Global Partners to postpone the auction until Feb. 15 and for the company to give employees time to offer the company fair market value for all the machinery.
The union has even hired as a consultant a former Haskon executive—who asked that his name not be used—in its efforts to keep the business alive. The former executive said he thought the union's efforts could work because there weren't many competitors in the market. “I believe there is room for Haskon,” he said. “A lot of businesses seem to be willing to do business with them again.”
The executive also said being a small player in the field could prove to be an advantage and that the union was getting help from government officials who don't like the pro-spect of losing 100 jobs. He added that the union group would need investors to make the plan a viable option.
Kirkhill-TA's Sweeney views the situation much differently.
“They have not shown any financial wherewithal,” he said. “They have thrown out many options but have shown no financial backing, no organization and no business plan. If they came to me with a check tomorrow and made an offer and be able to back it up with some financial wherewithal, we'd listen to them.”
The ICA Group study is part of what Sweeney sees as half of the story being put out there. He said the consultants did the study, found excess capacity and called on companies in the industry, finding that they weren't interested in investing.
“Out of all of it, they came up with some way to get that imaginary business (government contracts for small business) without identifying anything specific,” Sweeney said. “Is it something that's completely impossible? I don't know. Is it something that's plausible? I'd say it's highly unlikely.”
The Kirkhill-TA executive said his company is one of the leaders in the aircraft seal sector, which he said is a competitive market with a number of large and many smaller manufacturers. “If you did an analysis of the industry, you would come to the conclusion that there is excess capacity in the industry,” he said.
As for using eminent domain on machinery, Sweeney said while he is not an attorney, “that sounds like a novel approach.”
He sees the open auction as the best option for Esterline to divest itself of the array of presses and other equipment left at the facility; some machinery was moved to Brea.
“It's an above-board way to see who is willing to pay for the equipment,” Sweeney said.