Rath Employees Presented With Plan To Save The Plant
WATERLOO, Iowa (AP) _ Workers at the employee-owned Rath Packing Co. were asked Sunday to give $4,500 each to reopen the plant, and backers of the plan got 535 of the almost 700 signatures they need.
The plant, which sought protection from its creditors under federal bankruptcy laws in November, needs to produce an operating plan by Feb. 1 or face liquidation, Rath President Lyle Taylor said.
About 1,200 people attended a stormy meeting to hear about the plan for them to donate immediately $1,500 each and then agree to $3,000 in payroll contributions during the next three years.
Three million dollars is needed as equity to acquire a $30 million loan to reopen the meatpacking plant.
Lavern Patrie, chairman of a labor-management committee seeking to reopen the plant, said 535 people pledged the money after the meeting. Seven hundred pledges are needed before the plan can work, and those pledges must be in by Wednesday, Patrie said.
″We didn’t get quite as much as we’d hoped today,″ Patrie said. ″But we’re coming along quite well. We’re still optimistic.″
The pledges came after a meeting that included several angry outbursts from workers and some strong objections to the plan.
Several workers questioned how unemployed workers could persuade anyone to loan them $1,500.
″Nobody is going to loan this group nothing,″ said Virgil Hamilton. ″How are we going to get the money when we can’t make payments on our other loans?″
Patrie said he had been assured by several lenders that they would work with Rath employees to help get loans.
″You’re telling me that no lending institution in this town wants to see 1,400 people put back to work,″ Patrie said. ″I simply don’t believe that, this whole town needs that plant to reopen.″
Taylor has proposed making the company a regional processor that would do business only in the Midwest, providing about 500 jobs. Another plan is to find an outside buyer, but that seems to have become less likely in the past few weeks.
Taylor said he supported the employees’ plan over any others he had seen, but added that getting a $30 million loan would be difficult for a company with no assets to borrow against.
If necesary pledges from the workers come in by Wednesday, several more meetings would be planned to work out details before the Feb. 1 court hearing, Patrie said.