Hyatt-Clark Proposes Layoffs, Salary Cuts to Cure Ills
CLARK, N.J. (AP) _ Hyatt-Clark Industries has asked its unionized workers to accept wage and benefit cuts and layoffs of 125 employees, while also seeking to satisfy creditors and attract a buyer.
Howard Kurt, president of the employee-owned, financially-troubled roller bearing manufacturer, said the proposed contract modification would savee Hyatt-Clark $12 million over the next year.
The plan was submitted to Local 736 of the United Automobile Workers on Tuesday. Local 736 represents 1,100 production workers at Hyatt-Clark, which earlier this month filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Newark.
All 1,100 unionized workers were laid off indefinitely Dec. 20, but about 135 returned to work about a week ago.
Kurt said the ″interim″ contract agreement would lay off 100 union workers and 25 white-collar employees, and cut wages by 15 percent and benefits by half.
Kurt said the company could ask the bankruptcy court to implement the plan if the union rejected it.
Following a three-hour meeting here between plant management and labor representatives, UAW negotiator James Zarrello said the union would consider the proposal and offer a counter-proposal by no later than next Monday.
″Our position is that we want a chance to work something out before they go to court to impose something, and we believe management is amenable to further negotiations,″ said Zarrello. ″We don’t believe there was equality of sacrifice among hourly and salaried workers in the management proposal.″
The company proposal was made one day after Hyatt-Clark executives met in New York with officials of General Motors Corp., seeking assurances needed for revival of the plant. GM owned the plant for nearly four decades before selling it to its employees in 1981 and is currently its largest customer.
Kurt said GM tentatively agreed to ensure that money it owed to Hyatt-Clark for roller bearings would be used to repay a $3.6 million loan to First Fidelity Bank of New Jersey. The bank had placed a lien on Hyatt-Clark’s accounts receivable from GM, prompting the Chapter 11 filing the next day.
The repayment plan would guarantee Hyatt-Clark enough capital to resume full operation, should the new labor agreement be accepted.
GM has also agreed to continue negotiations with a prospective buyer of Hyatt-Clark, Kurt said. LSB Industries of Oklahoma City, Okla., had unsuccessfully requested that GM continue to underwrite $23 million in bank loans to Hyatt-Clark.
GM also will continue with its three-year agreement to buy $250 million in bearings products from Hyatt-Clark, Kurt said.