Plant workers at HPM Corp. have endured massive layoffs as the machinery maker struggles to survive in Mount Gilead, Ohio. Then last month, they got a surprise - their health-care benefits were gone, after the cash-starved company got behind on premium payments, union officials said.
For Local 1319 of the International Association of Machinists and Aerospace Workers, the situation is urgent, said Earl Gilkison, the IAM's local business agent. Gilkison said HPM has continued to deduct money from the paychecks of factory employees.
``The current carriers have dropped the coverage for all the hourly employees due to lack of premiums by the company,'' he said.
William Flickinger, president and chief operating officer of HPM, did not return telephone calls. A 10 percent owner of HPM, Flickinger is trying to buy the company from the majority owner, an investment company that includes Los Angeles businessman Parviz Nazarian.
Gilkison said he believes the company has resumed making some premium payments for the health coverage, although IAM members were still without coverage, he said in a June 14 telephone interview from the union office in Galion, Ohio.
``Hopefully it's in the process of being reinstated,'' he said.
Gilkison said 58 production people are still working at the factory, which makes injection molding machines, extrusion lines and die-casting machines. He did not know how many office workers are still employed.
Earlier this year, total employment was about 300. HPM employed more than 500 in 2000.
``We're still manning the plant. We're keeping the doors open,'' Gilkison said.
In the past, Flickinger has said that HPM is the victim of ``a very strained banking relationship.'' Now several sources familiar with HPM say its main lender, Fleet Capital Corp., has clamped down on HPM, putting the machinery maker into a severe cash squeeze. In addition, several suppliers have sued HPM for money owed.
Leslie Reuter, senior vice president of Fleet Capital in Los Angeles, declined to comment. ``We're governed by confidentiality agreements, and we can't breach them,'' she said.
In another development, Gilkison of the IAM said HPM workers may try to buy the company through an employee stock ownership plan. ``We're checking every possibility that we have for an ESOP,'' he said.
The Ohio Employee Ownership Center at Kent State University is doing a feasibility study to see if it makes sense.
Gilkison said the union hopes to keep the plant open.
``HPM is a good company. It's got a good product line, and we want to continue to build presses and keep our members employed,'' he said.