NOTICE: This
opinion is subject to formal revision before publication in the bound volumes
of NLRB decisions. Readers are requested
to notify the Executive Secretary, National Labor Relations Board,
Grenada Stamping and Assembly, Inc., formerly
known as Grenada Manufacturing Acquisition Corp. and Grenada Manufacturing, LLC and United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied-Industrial, and Service Workers International
Union. Cases
26–CA–22031, 26–CA–22041, and 26–CA–22077
December 21, 2007
DECISION AND ORDER
By Members Schaumber, Kirsanow, and Walsh
On June 12, 2006, Administrative Law Judge John H. West issued the attached decision. The Respondents filed exceptions and a supporting brief, the General Counsel and Charging Party filed answering briefs, and the Respondents filed reply briefs.
The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.
The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,1 and conclusions as modified and to adopt the recommended Order as modified and set forth in full below.2
i. introduction
The judge found a poll that the Respondents Grenada
Manufacturing, LLC (GML) and Grenada Stamping and Assembly, Inc. (GSA)3 conducted was unlawful because they
failed to comply with the advance notice requirement of Texas Petrochemical Corp., 296 NLRB 1057 (1989), enfd. as modified
923 F.2d 398 (5th Cir. 1991), and the procedural safeguard requirements of Struksnes Construction Co., 165 NLRB
1062 (1967). We affirm this finding.4
Also, for the reasons set out below, we find that GSA became a perfectly
clear successor to GML at least as of March 30, 2005.5 Finally, we adopt the judge’s finding that
GSA violated Section 8(a)(1) by telling employees Bennie Collins and Lin Paige
that they could not discuss the
ii. facts
Respondent Grenada Manufacturing, LLC (GML) started
manufacturing stamped metal parts at its
On September 24, 2003, ICE formed Respondent Grenada Manufacturing Acquisition Corporation (GMAC) for the purposes of managing the business of GML and acquiring its assets. On February 21, 2004,6 GML and GMAC entered into an asset purchase agreement that outlined the conditions under which GMAC would purchase the assets and properties of GML.
On February 23, GMAC and GML entered into a management agreement
that gave GMAC certain management rights, including the control of all GML’s assets,
cash, accounts receivable, furniture, fixtures, and equipment. Under the agreement, GMAC also had the
authority to implement and terminate GML’s contracts and agreements and to hire
and discharge GML’s employees. By the
terms of the agreement, Gary Houston became general manager of GMAC.
Meanwhile, the
On March 4, the
On April 5, GML filed a voluntary petition for relief under chapter 11 of the bankruptcy code. GMAC continued to manage GML’s operations under the management agreement.
In September, the
On January 24, 2005,8
the Union met with
On March 24, the Respondents polled the unit employees to
determine if they still wanted the
Also on March 30, the sale of GML’s assets to GMAC was
completed and, as noted, GMAC changed its name to GSA. Some time before the sale was completed,
Between April 1 and June, GSA conducted employee meetings to inform employees of changes that GSA intended to make concerning their terms and conditions of employment. Also, shortly after April 1, Melton posted a copy of the new personnel policies and procedures on the facility’s bulletin board.
On April 7, GSA informed unit employees of a new 401(k) plan. On April 14, GSA told unit employees about certain health benefits changes. On April 19, GSA announced the creation of a voluntary retirement plan. About the same time, GSA advised employees of a change in their vacation year from fiscal year to calendar year. GSA also changed vacation pay rates and discontinued the contractual grievance procedure. Finally, on or around April 24, GSA removed the Union bulletin board.
iii. analysis
The Respondents admit in their answer to the complaint
that GSA became a successor to GML on March 30, 2005. In NLRB
v. Burns International Security Services, 406 U.S. 272 (1972), the Supreme
Court stated that although a successor employer “is ordinarily free to set
initial terms on which it will hire the employees of a predecessor, there will
be instances in which it is perfectly clear that the new employer plans to
retain all of the employees in the unit and in which it will be appropriate to
have him initially consult with the employees’ bargaining representative before
he fixes terms.” 406
GSA clearly invited GML’s employees to accept employment
and informed them of its intent to hire them during employee meetings on March
30 or 31. Contrary to the Respondents,
there was no announcement at this time that GSA intended to establish unilaterally
new terms and conditions of employment.
There was no such announcement during any of GSA’s dealings with the
Accordingly, for these reasons, we find that GSA was a perfectly clear successor to GML at least as of March 30, 2005.11
Amended Conclusions of Law
Substitute the following for the judge’s Conclusions of Law 4, 5, 6(a) and (b), and 7(a).
“4. Since about September 1999 until about March 29, 2005,
based on Section 9(a) of the Act, the
“5. At all times since about March 30, 2005, based on
Section 9(a) of the Act, the
“6. (a) Conducting a poll among Respondent Grenada Manufacturing, LLC’s employees on March 24, 2005 concerning their union sympathies.
(b) Respondent Grenada Stamping and Assembly, Inc. telling
employees on two occasions on about April 21, 2005 that they could not discuss
the
“7 (a). By conducting a poll among Respondent Grenada Manufacturing, LLC’s employees on March 24, 2005 concerning whether they desired to be represented by the Union without giving reasonable advance notice to the Union of the time and place of the poll.”
Amended Remedy
Having found that the Respondent Grenada Stamping and
Assembly, Inc. has engaged in certain unfair labor practices, we shall order it
to cease and desist and to take certain affirmative action designed to effectuate
the policies of the Act. We shall order
the Respondent to bargain with the Union as the exclusive collective-bargaining
representative of the bargaining unit and, if requested by the
ORDER
The National Labor Relations Board adopts the recommended
Order of the administrative law judge as modified and set forth in full below
and orders that Respondent Grenada Stamping and Assembly, Inc.,
1. Cease and desist from
(a) Coercively polling its employees concerning their
support for the
(b) Refusing
to bargain with the Union as the exclusive bargaining representative of its
unit employees by failing to provide the Union with reasonable advance notice
of the time and place of a poll of unit employees taken for the purpose of
determining their desire for continued representation by the
(c) Telling
employees that they cannot discuss the
(d)
Failing and refusing to recognize and bargain with the
(e)
Unilaterally changing the terms and conditions of employment of its unit
employees without first bargaining with the
(f)
Failing and refusing to furnish the Union with the necessary and relevant
information the
(g) In any like or related manner interfering
with, restraining, or coercing employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act.
(a) Bargain with the Union as the exclusive representative of the employees in the following appropriate unit concerning terms and conditions of employment and, if an understanding is reached, embody such understanding in a signed agreement:
All production and maintenance employees employed by
Respondent Grenada Manufacturing, LLC and later by Respondent Grenada Stamping
and Assembly, Inc. at Respondent’s
(b) On request by the
(c) Make unit employees whole for any loss of earnings and other benefits suffered as a result of the unlawful unilateral changes in the manner set forth in the remedy section of this decision.
(d) Furnish the necessary and relevant information requested
by the
(e) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
(f) Within 14 days after service by the Region, post at
its facility in
(g) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.
Dated,
Peter
C. Schaumber,
Member
Peter
N. Kirsanow,
Member
Dennis P. Walsh, Member
(seal) National
Labor Relations Board
APPENDIX
Notice To Employees
Posted by Order of
the
National Labor Relations Board
An Agency of the
The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage on any of these protected activities.
We will
not coercively
poll you concerning your support for the
We will
not refuse to
bargain with the Union as the exclusive bargaining representative of our unit employees
by failing to provide the Union with reasonable advance notice of the time and
place of polls of unit employees taken for the purpose of determining their
desire for continued representation by the
We will not tell you not to discuss the Union while at work.
We will
not fail and refuse to recognize and bargain with the
We will
not unilaterally
change the terms and conditions of employment of unit employees, without first
bargaining with the
We will
not fail
and refuse to furnish the Union with necessary and relevant information the
We will not in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act.
We will bargain with the
All production and maintenance employees employed by
Respondent Grenada Manufacturing, LLC and later by Respondent Grenada Stamping
and Assembly, Inc. at Respondent’s
We will, on request by the
We will
make unit employees whole for any loss of earnings and other
benefits suffered as a result of the unlawful unilateral changes.
We will furnish the necessary and relevant information requested by the
William
F. LeMaster, Esq. and Linda M. Mohns,
Esq., for the General Counsel.
Kenneth
E. Milam, Esq. and R. Reid McKee, Esq. (Watkins
& Eager PLLC), of
Roger K.
Doolittle, Esq. (Doolittle and Doolittle), of
DECISION
Statement of the Case
John H. West, Administrative Law Judge. This case was tried in
Respondents deny
violating the Act as alleged. Additionally, Respondents argue that (1) all
claims against GML are barred by Order of the United States Bankruptcy Court
for the Northern District of Mississippi in Case No. 04–12077 dated March 10;
(2) Respondent GSA had actual knowledge that the United Steelworkers of
America, AFL–CIO–CLC Local 202-A did not in fact represent a majority of its employees,
pursuant to Levitz Furniture Co. of the
Pacific, 333 NLRB 717 (2001); and (3) Respondent GSA had a reasonable
doubt, based on objective considerations, of the Union’s majority support and
lawfully conducted a poll of its employees pursuant to the United States
Supreme Court decision in Allentown Mack
Sales & Service, Inc. v. NLRB, 522 U.S. 359 (1998), and Struksnes Construction Co., 165 NLRB
1062 (1967).
On the entire
record, including my observation of the demeanor of the witnesses, and after
considering the briefs filed by the General Counsel,[4]
the Respondents, and the Charging Party, I make the following
Findings of Fact
i. jurisdiction
GML, a limited
liability company, until March 30, 2005, had been engaged in the operation of a stamped metal
parts factory, at its facility in Grenada, where during the calendar year ending
December 31, 2004, it (a) sold and shipped products, goods, and materials
valued in excess of $50,000 directly to points located outside of the State of
Mississippi, and (b) purchased and received products, goods, and materials valued
in excess of $50,000 directly from points located outside of the State of Mississippi.
At the hearing (Tr. 120 and 121), GSA stipulated that during the 12-month
period ending August 31, 2005, in conducting the involved business operations,
(a) it sold and shipped from its Grenada facility products, goods, and materials
valued in excess of $50,000 directly to points located outside the State of
Mississippi, and (b) it purchased and received at its Grenada facility
products, goods, and materials valued in excess of $50,000 directly from points
located outside the State of
ii. alleged unfair labor practices
When called by
the Respondents, Brannan James Anderson, who at the time he testified at the
trial herein was employed by GSA and formerly was a partner in GML, testified
that it was his understanding that GML was formed when a group of managers who
worked for Textron took the plant private in 1999, forming the company GML when
Textron put the involved plant up for sale[5];
that he was hired by GML in September 2002 as vice president of finance; that
at the time GML was producing parts for Ford, Collins, and Ackman for Chrysler
and GM, and for Frigidaire, a division of Electrolux; that GML had entered into
an agreement with Oxford Automotive (Oxford) to produce parts for the Nissan
Canton plant which went into their minivan and pickup trucks; that GML secured
the financing for the presses to be used to stamp out the Nissan parts; that
there were problems in doing the work on the Nissan parts; that he discussed it
with Oxford and he tried to find someone in the industry to partner up with to
save the plant and the jobs; that ICE Industries showed interest and visited
the Grenada plant; that in January 2005 Oxford visited the Grenada plant and advised
GML that Oxford was going to remove the minivan work from GML; that Oxford
filed a lawsuit in Federal court to remove the tools (the dies used in the
presses) from GML’s Grenada plant; that Nissan had approved Oxford moving the
dies from GML’s Grenada plant; that one of the presses was purchased by GML
exclusively for the Nissan program and that 600-ton press was totally worthless
at that point if the Nissan work was lost; that two of the partners in GML,
Larry Walters—who was the vice president of engineering, and Wayne Taylor—who
was the president of GML, opposed GML entering into a Management Agreement with
ICE Industries; that Walters and Taylor were removed from their positions and
terminated, and he was made general manager of GML; and that GML entered into
the Management Agreement with ICE Industries.
Jerry Lumbrezer,
who is the director of finance of ICE Industries and is responsible for all the
day-to-day operations of all the plants and subsidiaries of ICE Industries,
testified that around September 2003 management teams from ICE Industries and
GML first met to discuss a possible acquisition; that his boss, Jeff Boger, was
doing the “due diligence” on GML to determine if ICE Industries would be
interested in a Management Agreement or a purchase of GML; and that due
diligence took place from late in the third to fourth quarter of 2003, through
2004, and into 2005 until, as described below, the bankruptcy was settled and
the Asset Purchase Agreement was finalized.
GML and the
Lumbrezer
testified that in the February—March 2004 timeframe, as indicated above,
General Counsel’s
Exhibit 27 is a letter which, as here pertinent, reads as follows:
Governor Haley Barbour
. . . .
February 5, 2004
. . . .
Ice Industries’ goal is to turn Grenada Manufacturing into the South’s premier automotive stamping facility. We are committed to and will work diligently towards creating high-skilled, high paying jobs.
Ice Industries has a proven track record in turn-around situations. We have rescued two faltering companies over the past five years, salvaging over 200 jobs. We are confident that our plan for Grenada Manufacturing will experience similar success and that we can grow the facility substantially over the next three years and beyond.
Our immediate primary objective is to secure a long-term relationship with Nissan Automotive. We have the wherewithal to be one of their world-class suppliers.
Thank you for any help you and your staff can offer.
Respectfully,
Howard Ice, Jr.
President
Ice Industries
Lumbrezer testified that this letter was
written because Nissan wanted to pull its tooling out of GML’s plant, Ice Industries
wanted the opportunity to prove itself to Nissan, and Ice Industries was asking
the office of Governor Barbour to work with Nissan.
By letter dated
February 13, 2004, on ICE Industries letterhead (GC Exh. 30), Howard Ice
advised Doug Rossman, vice president of purchasing of
Over the past 5 months we have extensively researched the purchase of Grenada Mfg. As you are well aware, there have been substantial obstacles to overcome in getting to the point that the acquisition made financial / operational sense.
We now have an operational plan that will put together a world-class stamping company, combined with other Ice Industries resources, to create a smooth running operation for our customers.
Our immediate goal is to stabilize the operations and to begin the turn-around process that we feel will make substantial gains within 2 months. Because we have done this before at our other locations, we are very confident that all customers will see an immediate impact and long-term gains from our management of the company.
We look forward to fixing the relationship that
. . . .
General Counsel’s
Exhibit 20 is an Asset Acquisition Agreement between GMAC, an
General Counsel’s
Exhibit 19 is a Management Agreement effective as of “2/23/04” between GML (owner)
and GMAC (manager). The recitals at the beginning of the agreement read as
follows: “A. Manager owns and operates metal stamping and fabrication
facilities. B, Owner desires to contract with Manager to operate Owner’s metal
stamping and fabrication facilities located in Grenada, Mississippi and any
other location where Owner operates (the ‘Business’).” The Manager’s Authority
portion of the Agreement reads as follows:
3. Manager’s Authority. Manager shall use its reasonable best efforts to provide administrative, management and supervisory services to Owner to operate the business of Owner. In order to efficiently operate the Business, Manager shall have (subject to the limitations otherwise set forth herein) the following authority:
A. To control all of the assets used or useful in the operation of the Business . . ., including, but not limited to, all cash . . ., marketable securities, notes receivable, accounts receivable, and all furniture, fixtures and equipment.
B. To implement and/or terminate all contracts, agreements and other arrangements of Owner in connection with the Business.
C. To make all purchases and to enter into any contracts or agreements necessary for the operation of the Business.
D. To collect all Revenues of the Business and to have full control over all sales, collections and agreements of the Business.
. . . .
E. From Revenues, to pay all Expenses of the Business, and have full control over all purchases, orders and other expenditures of the Business.
. . . .
F. To provide all management and oversight of Owner’s employees who shall be and remain on the payroll of Owner. Manager shall have the right to hire or discharge all employees, on terms and conditions it may deem reasonable.
G. To establish and supervise an accounting system . . . .
H. To receive, consider, and when it deems appropriate, handle the complaints of any customers of the services or the products provided by Owner.
I. To deposit in a banking institution or institutions selected by Owner and in accounts in the name of Owner, all Revenues received by Manager for or on behalf of Owner and to pay from such accounts on behalf of Owner, the Expenses, and to negotiate, endorse and otherwise sign, by and on behalf of the Owner, any and all instruments, checks, draws and other documents.
J. To maintain such policies of insurance against liability . . . and such other policies . . . as are necessary . . . .
K. Except as otherwise set forth herein, in the name of Owner, operate the Business and to make all decisions and commitments and take all actions it deems appropriate in connection therewith.
L. Manager shall perform its duties hereunder in a manner which it believes, in its reasonable discretion, is in the best interests of the Business, and will use the skill and care of a similarly situated commercially reasonably manager. . . .
M. To purchase, rent, and lease and to install or remove equipment or assets . . . [with specified exceptions, namely described presses] for use in the Business. . . . .
4. Manager’s Compensation. Manager, as compensation hereunder, shall retain all Revenues less all Expenses; provided that in no event shall such compensation be less than $20,000 in any given month, as averaged over a 24 month period.
. . . .
Lumbrezer testified that part of the
reason that the Management Agreement was entered into was that Ice could continue
to do due diligence on GML to see if Ice even wanted to purchase it, GML “had
run out of time” (Tr. 111), and GML was “two
weeks from closing the door.” (
Chet Melton, the
vice president of human resources for GML, gave the following testimony:
Q. When did you begin working for Grenada Manufacturing Acquisition Corp., which then changed its name to Grenada Stamping?
A. Actually it was a Management Agreement we had, Grenada Manufacturing, LLC had with Grenada Manufacturing Acquisition Corporation, as far as management of the facility. I was still in the capacity of Vice President of Human Resources for Grenada Manufacturing, LLC. [Tr. 227.]
Melton testified that from the time the
Management Agreement went into effect through the end of 2004 he was paid by
checks of Grenada Manufacturing Acquisition Corporation; and that during that
period he worked more just as a manager rather than a vice president and owner.
Gary Houston,
who describes himself as a turnaround specialist, testified that he became
General Manager with GMAC with the signing of the aforementioned Management
Agreement, and he came to Grenada to run GML’s facility; that he was never an
employee of GML; that he was a consultant while he worked in Grenada, and he
was paid by ICE Industries; that it was his job to come to Grenada and determine
whether GML could be turned around; that he was responsible for the turnabout
and implementing things that he felt were necessary for the business to
survive; that GML had lost one-half of the Nissan business and the other half
was in court in that Nissan had filed a lawsuit to pull the rest of the dies
out of GML’s facility; that GML’s largest customer, Electrolux, which is an
appliance manufacturer of stoves and refrigerators, among other things, was
getting ready to replace one of the jobs that GML was doing and it was going to
give GML the new die based on its performance/financial situation; that Electrolux
“did not want to continue to do business with us” (Tr. 220); that Ford Motor
Company was ready to pull all of its work out of GML; that the first thing he
had to concentrate on was to salvage the current customer base; that as general
manager of GMAC beginning in February 2004 he signed all of the checks required
for the day-to-day operations of the GML facility; that he could write a check
up to a certain amount but he did not know what that amount was; that he wrote
checks for materials; that he had input regarding labor relations matters and
personnel issues; that he solicited input from others but he had final say in
making decisions regarding the facility, including management decisions dealing
with labor relations matters; that to his knowledge, it was never necessary to
amend the Management Agreement that had been executed in late February 2004;
that to his knowledge, the relationship between GMAC and GML never changed in
any significant respect during the time period that the Management Agreement
was in effect from late February 2004 through the end of March 2005; that without financing from ICE Industries, GML
could not have funded all of its operations and met payroll on a timely basis,
and it could not have timely filled the orders that had already been placed by
its customers; that he first came to the involved Grenada facility in the
latter part of February 2004; that there were two group meetings with employees
the first Monday after he arrived in Grenada, and that was the only time; that
Anderson introduced him as part of the management group which came to help the
manager; that this was after the Management Agreement was signed; that from
that date forward he was at the facility more or less day in and day out; that
the employees were told at the two aforementioned meetings that he was the new general
manager of the facility; that there were no immediate changes in the size of
the workforce or the product being produced in late February early March 2004;
that Melton was in charge of making sure that GMAC would have a workforce when
the sale was finalized; and that Melton continued to work for GML throughout
the term of the Management Agreement.
Bennie Paige,
who is a department leader of the Company and officer of the Union, testified
that Gary Houston was introduced to employees as a group in late February 2004;
that after Gary Houston began working at the facility he did not notice any
changes in his, Paige’s, employment, in his job duties, in the processes or
machinery being used, or in the products being manufactured; and that at that
time there was no change in the benefits, and the workforce was not increased
of decreased. On cross-examination, Paige testified that after Gary Houston
came on board there were layoffs; and that with respect to one layoff, he filed
a grievance and three of the four employees who were laid off were recalled.
Lin Collins, who
retired in June 2005 after working at the involved Grenada facility for 33
years, testified that he was a forklift operator and he was the president of
Local 202 of the United Steel Workers; that he attended a meeting for all employees
in the cafeteria where Gary Houston was introduced by Melton, with Melton
indicating the Houston would be managing the plant; and that after that nothing
changed in terms of his day-to-day work life in that he still worked the same
shift, doing the same type of work, receiving the same benefits, there was no increase
or decrease in the size of the workforce at that time, and to his knowledge,
there was no change in the products that were being produced at GML at that
time.
When called by
the Respondents, Anderson testified that after Gary Houston came to manage the
Grenada plant, his, Anderson’s, duties at that time were to facilitate the
eventual sale of assets; that GML entered into the Management Agreement to get
(1) management expertise and the technology that GML did not posses, and (2)
assets to be able to run the business as a going concern so it could be sold;
that GMAC was not operating the Company; and that GMAC was in effect a banker
for GML.
Gary Houston
testified that ICE Industries decided that it could no longer go forward with
the Asset Purchase and had to go the bankruptcy route when it realized the
extent of the possible involved liabilities regarding environmental issues and
the under funded pension fund.
When called by
Respondents, Anderson testified that ICE Industries began looking at the
environmental and pension issues and then it came to their attention that
Taylor, unknown to the other GML partners who were there at the time, had
entered into a Sales Management Agreement with Retmer Sales in Michigan which
claimed that GML owed them in excess of $300,000 for past commissions and would
be owed for any future commissions coming on any sales through GML; and that
ICE Industries then indicated that it could not go through with the sale unless
GML went through bankruptcy to clear up these three points.
In late February
2004 Melton, who as indicated above was GML’s vice president of human resources
and is GMAC’s human resources manager, telephoned Isaac Hardman, who is a staff
representative of the Union and who was negotiating with GML for a new contract,
and asked Hardman to meet with him and some other people because GML had a
potential buyer for the plant. They agreed to meet on March 4, 2004, at GML’s
facility in
Melton testified
that in February and March 2004 there were no significant changes to employees’
terms and conditions of employment, and there were no notable changes in the
size of the workforce or the product being produced in March 2004.
By application
dated March 3, 2004 (GC Exh. 32), GMAC, an
Gary Houston
testified that General Counsel’s Exhibit 33 is an organizational chart for “Grenada
Manufacturing”; that the chart is dated “3/04”; that he is listed as general manager
on the chart; that B. J. Anderson was affiliated with Grenada Manufacturing,
LLC in March 2004 as general manager of Grenada Manufacturing, LLC; that even
after he came in as general manager of GMAC, Anderson continued to hold the
position of general manager of Grenada Manufacturing, LLC; and that Anderson
does not appear anywhere on General Counsel’s Exhibit 33.
On March 4, 2004
Hardman, who was accompanied by Collins, Page, and May Bell Topp, met with
Melton, Howard Ice, who was the potential new owner, and Gary Houston, who
worked for Ice. Hardman testified that Ice indicated that he wanted to purchase
GML but (1) he would not purchase the pension program because it was in
deficit, and (2) he could not live with the seniority rules which were in place
at GML because his factories work on a team concept; that Melton said that if Ice did not purchase the plant, it would
shut down; and that Ice indicated that (a) he would recognize the Union,
(b) as soon as the purchase agreement was finalized he would sit down and negotiate
a new contract with the Union, and (c) employees would have to reapply for jobs
under the new GMAC. Hardman also testified that General Counsel’s Exhibit 3 is
an extension agreement entered into on March 4, 2004. It reads as follows:
TEMPORARY AGREEMENT BETWEEN
GRENADA MANUFACTURING ACQUISITION CORP.
AND
UNITED STEELWORKERS OF
LOCAL 202-A
The Company recognizes there is a union present.
The Company will not recognize the work rules, seniority, or classifications in the Grenada Manufacturing, LLC contract because of the flexibility that is mandated.
All pay scales, benefits, will remain as are currently practiced, including but not limited to:
Hourly wage rates Overtime pay
Medical Insurance Life/AD&D Insurance
Holidays Safety
Glasses
Bereavement Vision
All employees must fill out applications and be interviewed for potential hiring at Grenada Manufacturing Acquisition Corporation.
The Company does not recognize the Hourly-Rated Pension Plan as currently exists with Grenada Manufacturing, LLC.
The Company will negotiate a contract with current union representatives after completion of the Purchase Agreement.
The Company expects all cooperation necessary to achieve success at Grenada Manufacturing Acquisition Corporation.
This agreement will remain in force no later that October 31, 2004.
Agreed on 4th day of March, 2004 by:
. . . .
The agreement was signed by Hardman,
Collins (as president of Local 202-A of the United Steelworkers), Paige, Topp,
and Joe Walker for the
By letter dated March 15, 2004, on ICE
Industries’ letterhead (GC Exh. 31), Howard Ice advised Rossman, of Oxford
that, among other things, a Management
Agreement has been signed that gives ICE Industries full management rights to
GML; that the Management Agreement can last up to 12 years or up to the
execution of the Purchase Agreement; and that ICE Industries removed Taylor and
Walters from their management positions with GML and replaced them with a
general manager and controller from ICE Industries.
General Counsel’s
Exhibit 21 is a Memorandum of Agreement between GMAC and GML, dated March 16,
2004, pursuant to which GMAC advanced to GML $200,000 as a deposit for and
towards work to be performed by GML for DANA Corporation of Longview, Texas.
The agreement specifies that “[s]uch work, including expenses attendant
thereto, as is done, performed or advanced by . . . [GML] shall be credited
against said $200,000.00.” Lumbrezer testified that this was a prepayment to
GML, an extension of credit; and that Deerfield Manufacturing, a subsidiary of
ICE Industries, was doing work for DANA and it was ICE’s intention to move the
work to
General Counsel’s
Exhibits 28 and 29 are two letters, both dated March 24, 2004, from Ice to the mayor
of
Grenada Acquisition Corporation, a Subsidiary of Ice Industries,
has entered into two agreements with Grenada Manufacturing, LLC. The first
agreement is a Management Agreement that gives Grenada Acquisition Corp. full
management rights of Grenada Manufacturing. The second agreement is an Asset
Purchase Agreement that is executed once all outstanding issues with Grenada
Manufacturing are resolved through the Management Agreement. We are hopeful
that we will work through all issues, but no commitments have been made at this
time to guarantee the longevity of the
Because some of the issues could seem insurmountable
without Local, State, and Federal assistance,
1. Indemnification from environmental risk:
2. Distress termination of under-funded pension: Grenada Mfg. LLC, Federal PBGC.
3. Debt re-structuring and relief:
The attached document outlines our
request for help from
Once all issues are resolved, Grenada Acquisition
Corporation will be prepared to execute the Asset Purchase Agreement with
Grenada Mfg. LLC. Although some of these issues are difficult, we believe that
the long-term potential of the
Unfortunately, without substantial help to get all issues
resolved to our satisfaction, there is no way to commit to an ongoing operation
at
Thank you for your assistance and support of the
Sincerely,
Howard Ice, Jr.
President
Ice Industries
The attachment to General Counsel’s
Exhibit 28 requests Grenada County to assist with respect to (1) environmental
indemnification, (2) lease payments, (3) property loans/financing, and (4) past
due property taxes. The attachment to General Counsel’s Exhibit 29 requests the
city of
Lumbrezer
testified that his responsibilities with GMAC began in the March–April, 2004
timeframe; that as indicated by General Counsel’s Exhibit 15, which is an ICE
Industries organizational chart, he is the controller of Grenada Acquisition
Corporation, which is a subsidiary of ICE Industries; that Grenada Acquisition
Corporation and GMAC is the same entity; that he was not an employee of, on the
payroll of, or affiliated with GML; that two of the subsidiaries of ICE
Industries, namely Acklin Stamping Company and Deerfield Manufacturing basically
service automotive or refrigeration and aerospace markets; that since February
2004 ICE Industries exercised full managerial control over GML; that GMAC was
created to acquire the assets of GML and to manage this business while the
bankruptcy and ultimate sale was pending; that the Management Agreement, which
was not amended, was in effect from February 2004 through March 2005; and that
the relationship between ICE Industries, GMAC, and GML basically remained
unchanged from February 2004 through March 2005.
General Counsel’s Exhibit 22 is an April 5, 2004 Interim Order of David W. Houston III, United States Bankruptcy Judge in the United States Bankruptcy Court for the Northern District of Mississippi in the aforementioned Chapter 11 proceeding of GML. The order granted the Emergency Motion for an Order authorizing debtor-in-possession to incur secured indebtedness pursuant to section 364, and related relief. Lumbrezer testified that the Interim Order was entered on the same day the bankruptcy petition was filed. The Interim Order indicates that GMAC has agreed to provide an additional, postpetition loan to debtor GML. The Interim Order authorizes GMAC to loan debtor GML up to $300,000 to be secured by a subordinate lien upon all of the debtor’s assets, subject to all duly and properly perfected security interests that existed as of the date of the filing of the petition, and subject to all the liens granted to Commercial Capital Lending, Inc, GML’s primary working capital lender, as a result of its factoring arrangement and agreement. And the Interim Order specifies that the $300,000 additional advance from GMAC to debtor GML shall be utilized to, among other things, pay for purchases of raw materials and inventory, employees’ salaries, and other expenses of administration, as necessary to allow debtor GML to fill existing and future orders from its custome