Lawmakers Condemn ATK Plant Closure
Legislators again look to intervene
June 10, 2009
While the defense space boasts less cyclicality, deal pros realize that comes at a price. Alliant Techsystems (ATK), following its acquisition of Eagle Industries in the last week of March, is paying that price as it deals with legislators unhappy about the company’s actions following the purchase.
In the deal, Alliant paid an estimated $100 million for the Fenton, Missouri-company, a maker of tactical accessories for the military, law enforcement and recreational markets.
In the last week of May, Alliant said it would close a New Bedford, Mass.-based textile plant, moving the manufacturing to an existing facility in Puerto Rico. US Senators Ted Kennedy and John Kerry, and Representative Barney Frank responded with a letter calling for the US Army to “insist” that any contract extension be contingent on the New Bedford plant staying open.
The letter suggested that Alliant was motivated to close the facility after attempts to organize the plant’s workforce. Moreover, the letter questioned the possible risk of reducing “the domestic apparel industrial base” that serves service personnel. The legislators also played up the populism angle, saying the acquisition and subsequent closure was done solely to help Alliant “obtain higher profit margins out of an existing contract.”
“We can be justifiably indignant and even surprised when a company assumes it can take taxpayer money, devastate the lives of hundreds in a community, create uncertainty with regard to its ability to deliver on a contract needed to support our troops and simply assume that future federal contract revenue will continue unabated and without examination for the foreseeable future,” the lawmakers wrote.
A spokesperson for Alliant wouldn’t comment specifically about the letter, but did say that the decision to close the New Bedford facility was “underutilized and operating well below capacity.” The spokesperson added Alliant’s goal for Eagle is to “build a long-term and sustainable business,” and she envisioned adding new jobs as part of that effort.
The New Bedford plant, which is contracted with the Army to produce “modular lightweight load carrying equipment,” has roughly 350 employees. The plant is scheduled to be closed on July 31.
Roughly 100 workers rallied at the plant earlier in the day today, according to a press release issued by the SEIU.
The plant closure has sparked a fallout similar to what was seen in the Hartmarx bankruptcy, which saw legislators intervene to steer the sale to a more worker-friendly buyer. Republic Window and Doors, last year, also aroused lawmaker interest after the workers staged a sit-in that eventually prevented the plant closure.
The New Bedford plant in question was only recently acquired by Eagle Industries. According to an AP report, the company bought the facility from Michael Bianco Inc. following a 2007 US Customs raid of the plant that netted 361 undocumented workers.
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