Erie Plastics Corp. union workers ratified a new contract Sept. 22 that will pave the way for a new owner.
The contract will run to September 2011, according to Hoop Roche, Erie's chief executive officer. Workers agreed to substantial but undisclosed cutbacks in wages and benefits. The contract was ratified by members of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America.
Roche said Erie will continue business under new ownership and will be more competitive as a result of the labor agreement.
``We will go after business with a lower cost structure,'' Roche said in a Sept. 23 telephone interview, adding that the company will maintain Erie's reputation.
The firm's new name will be Wellington Products.
Crawford Group of Cleveland is negotiating to acquire Erie's assets in Corry, Pa., and at an operation in Hungary.
Ed Crawford, chief executive officer of Park-Ohio Corp., is negotiating on behalf of Crawford Group. The Crawford family has an investment in Park-Ohio and owns Crawford Group.
Crawford is negotiating to buy the assets by meeting Erie's creditor obligations rather than by buying stock.
Crawford Group provides management consulting services to a group of manufacturing companies.
``A loss of business'' brought Erie to the negotiating table. Early this year, Erie lost consumer product contracts with Procter & Gamble Co. that amounted to about half its business.
Erie subsequently cut its workforce nearly in half to its current level of about 200. Roche said the work was lost to other domestic molders.
Roche said he expects that most of Erie's workers will retain their jobs under the new ownership. He also will continue working with the business, but does not know yet in what capacity.
Union members voted 131-31 to accept Crawford's concessions, said Suzanne Chase, president of Local 88681. Concessions included wage cuts of up to $2 an hour, cutbacks of holidays and vacations, and higher insurance premiums. Members earn $8-$16 per hour, Chase estimated.
``[Crawford] did accept the union and will keep the seniority [of members],'' Chase said.
Hoop is Erie's majority shareholder. His father, Paul C. Roche Sr., established Erie in 1960.
Erie had estimated sales of $83 million last year, when it ran an estimated 67 injection presses.