Archive for December, 2006

Wayne Workers High on New Owners

December 26, 2006

**Originally Published in the Waterloo Courier**

CEDAR FALLS — Ira Perlmuter and Kevin Watje got off on the right foot with workers at Wayne Engineering. They fixed the pop machine.

It cost $1.10 to get a pop out of the machine there. Workers grumbled a little at coming off the production floor and having to dig around for the extra change, or having to load an extra buck into the machine and come back with a pocketful of more change.

“Somebody said, ‘Why don’t you make it a buck? So Ira made it a buck,” said employee Bill Miller,

It’s a small gesture. But Miller, bargaining unit chairman with United Auto Workers Local 838 at the plant, said it’s one of those little things that’s indicative of the attitude Perlmuter, Watje and the company’s new owners have for their employees — and the renewed morale workers there feel in kind.

‘It’s little stuff like that. They’re going out of their way,” Miller said.

“It’s a difference in night and day the way these new owners treat us, and we already feel like family around here,” said Russ Petersen, a 20-year Wayne employee, as he and other worker enjoyed a catered holiday dinner put on by the new owners. “We’re hoping for a good 2007 and a good future with them.”

The new Wayne owners, officials with Wayne Industrial Holdings, plan immediate hiring, project a 40 percent increase in sales over the next year and anticipate a plant expansion to begin as soon as late 2007. Watje, company president, anticipates some additional hiring beginning this week. They also have plans for new product development.

Wayne Industrial Holdings, a Nevada firm, bought the company for $7.4 million at a bankruptcy court auction Dec. 6; the deal was closed Dec. 8.

“Everybody’s got an optimistic mood right now, because they’re talking about making the place better. And they’re making the workers involved,” said Rex Meyer, a nine-year employee.

Workers interviewed Dec. 21, two weeks after the 44-year-old garbage truck manufacturer changed hands, said the new owners have addressed their concerns about employee benefits and beyond. They’re also seeing signs that workers will get the resources they need step up production. UAW Local 838 members have been working nearly a year under terms of their old contract, and Watje and Miller said contract discussions are expected to begin in January.

“This’ll be subject to contract talks, but they (Wayne) talked 401K with a match, there’ll be the possibility of profit sharing. They told us what their goals are, and if we can help achieve them, they’re going to share with us,” Miller said. “They’re anxious to sit down and we are too, get it all behind us.”

And concentrate on making garbage trucks “That’s what we’ve wanted to do all along,” Miller said.

Watje, an Iowa native, is company president. Perlmuter, of New York, is non-executive CEO. He is managing director of the primary owner of Wayne Industrial Holdings, T5 Equity Partners, private equity arm of Triple Five Corp. of Edmonton, Alberta, Canada, owners of Mall of America in the Twin Cities.

“They could have went anywhere and been involved with anybody, but they chose to stop here and make an effort in this plant because they thought they could make something out of it,” Meyer said. “They make no qualms in telling you where they’re going and what they’re doing. They’re being up front and being honest with you. We have no reason not to believe them.”

The attitude in the plant, Meyer said, is the best it’s been in five years. “There’s a lot of people willing to step up right now and get it going,” he said. It’s almost to the point where workers, having come through the uncertainty of bankruptcy proceedings, have to pinch themselves to believe it’s true, he said.

Miller said the goal is to turn out one complete garbage truck a day. Watje said that’s something the workers, not he, came up with.

“We want to ramp up to one Curbtender (garbage truck) per day. That’s our flagship product. And the employees are motivated to do that,” Watje said.

Allen Petersen, Russ Petersen’s brother, has worked at Wayne 41 years. “There’s been a lot of good changes already. Stuff like this,” he said of the holiday dinner. “We were in suspense for years, no contract, keep hearing rumors, then all of a sudden it kicked in and here we are. Everybody’s in a different mood now. They all got rehired as far as I know, new insurance, we’re going to get back 401K (retirement plan) and they’ll match it, supposedly we’ll get our pension. I think we’re going to get some benefits out of this.”

Watje said virtually all the employees were retained except the former owners, members of the Worthington family, including former company president Cynthia Goro. The family founded the company and ran it through its entire existence, guided it through an earlier Chapter 11 bankruptcy reorganization in the 1980s and engineered a major relocation and expansion in the Cedar Falls Industrial Park. They mounted an unsuccessful bid to retain ownership of the company, in partnership with Republic Financial Corp. of Denver, Colo.

“I feel bad for them,” Petersen said, but he’s also looking to the future.

“You can’t put them down for trying. They’re people too,” Meyer said of Goro and the Worthingtons. “I hope they find better roads for themselves.”

Frank Martin, a former longtime executive with Waterloo Industries and Waterloo Castings, has been at Wayne seven years, working as an industrial engineer in charge of human resources. He, too, likes what he’s seen so far.

“Theres an emphasis on getting out production and whatever that takes, and a good plan to continue production, discussions on building expansion,” Martin said. “There’s lots of orders here, and lots of plans to get more orders. The funds are here, the bankruptcy’s over and production is climbing sharply. It’s a good foundation, and a good direction.”

Kevin Watje CEO

Waterloo Courier Wayne Engineering


New Wayne Owners Have Big Plans in Cedar Falls

December 16, 2006

**Originally Posted in the Waterloo Courier**

CEDAR FALLS — The new owners of Wayne Engineering plan immediate hiring, project a 40 percent increase in sales over the next year and anticipate a plant expansion to begin as soon as late 2007.

That’s according to the new company president, Kevin Watje, who began work at the garbage truck manufacturer this week, and Ira Perlmuter of Wayne Industrial Holdings, the concern that purchased the company last week in U.S. Bankruptcy Court.

“We’ve got a full production schedule,” said Watje, most recently an executive with Freightliner Inc. in Portland, Ore., and now a co-owner of Wayne. “The employees are motivated. They’re happy to see a change in direction. They’re all excited and motivated to move ahead.

“We’re probably looking at hiring a minimum of 10 or more production people, perhaps 20,” Watje said. “Long term, we expect to hire considerably more than that. In two years, I would expect as high as 50 or 60 more.” Wayne presently employs about 80 people.

“We’re going to introduce a few more products,” to fuel company growth, Watje said, including a new front loader and side commercial loader.

Prior to his work with Freightliner, Watje worked for a Wayne competitor in western Iowa, Scranton Manufacturing — New Way, in Scranton. He also co-operated a Kansas City-based refuse collection business with one of his brothers.

“We’ll be working hard to stay current with production, but I would anticipate that next year, probably in 2008, we’ll have to do an expansion, and perhaps might get started in the fall of 2007,” Watje said.

Perlmuter said Wayne Industrial Holdings has been working on company growth plans for months prior to the bankruptcy sale.

Wayne Industrial Holdings bought the company for $7.4 million in a bankruptcy auction, outbidding Wayne LLC, made up of Republic Financial Corp. of Aurora, Colo. former company President Cynthia Goro and her brothers, John and Wayne Worthington. Their father, Stan Worthington, founded the company in 1962.

Wayne LLC initially asked for a court stay of the auction closing, pending an appeal, but dropped that action after Wayne Industrial Holdings and bankruptcy trustee Wesley B. Huisinga closed on the sale late Dec. 8.

Wayne Engineering filed for Chapter 11 bankruptcy protection in July 2005, and in late February voluntarily converted those proceedings to an “operating” Chapter 7 case in U.S. Bankruptcy Court in Cedar Rapids.

Goro said in a phone message on her work phone she is no longer with the company. Attempts to contact her were unsuccessful.

Waterloo Courier Wayne Engineering

Firm buys Wayne Engineering

December 8, 2006

**Originally published in the Waterloo Courier**

CEDAR RAPIDS — A holding company owned by a Canadian firm which owns the Mall of America in the Twin Cities was the apparent high bidder for Wayne Engineering Corp. at a bankruptcy auction Wednesday, beating out a bid by the present owners.

Wayne Industrial Holdings LLC, incorporated in Nevada and affiliated with Triple Five Corp. of Edmonton, Alberta, Canada, submitted the high bid of $7.4 million for the 44-year-old Cedar Falls garbage truck manufacturer.

Wayne Industrial Holdings was successful over a bid by Wayne LLC, a concern made up of the members of the Worthington family, who founded the company. Wayne LLC’s top bid was $7.325 million. Each firm upped the bid five times until the maximum bid was reached.

Wayne Industrial Holdings’ purchase of Wayne Engineering is pending final approval by U.S. Bankruptcy Court, and anticipated to be closed by Dec. 15, bankruptcy trustee Wesley B. Huisinga said.

Ira Perlmuter, managing director of T5 Equity Partners, private equity arm of Triple Five Corp. and primary owner of Wayne Industrial Holdings, said his firm, with financial backing from Cedar Rapids Bank & Trust, intends to keep the company in operation in Cedar Falls and did not rule out adding employees or expanding.

“We are extremely excited about the opportunity to run the business with the assets of this great little company,” Perlmuter said. “We are very confident we, together with the union and other employees of Wayne, can grow the company aggressively in Cedar Falls,”

Many of the plant’s 80 employees are affiliated with United Auto Workers Local 838. Union officials could not immediately be reached for comment Wednesday following the auction.

Wayne Engineering President Cynthia Goro, whose father, Stan Worthington, founded the company in 1962, left the courtroom with no comment and could not be reached later in the day. Her brothers John and Wayne Worthington also are company officers.

Donald F. Barrickman, of Republic Financial Corp., of Aurora, Colo., which partnered with Goro and the Worthingtons in their proposal, said his firm and the family were “disappointed, obviously,” that they were unsuccessful. “We were looking forward to the opportunity to run the company,” he said.

Perlmuter said, “For the sake of the company, the employees and the community, we hope to have the full cooperation of the Worthington family to transition the company to our control. We intend to continue the long and distinguished tradition of the Worthington family to invest in and contribute to the local community.”

Perlmuter said he could not comment on whether or not Goro and her brothers would have an opportunity to work for the new company. Local economic developers have suggested that Goro and the Worthingtons know the business.

Huisinga has supervised the operation of the company by Goro and her brothers since February. “I would hope the Goros would assist in the transition,” he said. “They have done an admirable job in holding this company together. It’s a very difficult situation, and I appreciate the help and assistance they provided.”

Regardless of the buyer, Huisinga said the employees and the community should be happy about the sale of the company.

“It’s emerging, it’s out of bankruptcy, it’s a new company, it has financial backing and this will be good for all the existing employees and it will be good for the city of Cedar Falls,” Huisinga said.

Wayne Engineering filed for Chapter 11 bankruptcy protection in July 2005, and in late February voluntarily converted those proceedings to an “operating” Chapter 7 case in U.S. Bankruptcy Court in Cedar Rapids.

In a Feb. 28 court order, Bankruptcy Judge Paul Kilburg wrote, “The court finds that it is in the best interest of the creditors that the Chapter 7 trustee be authorized to operate the business in order to provide the best return for the creditors.”

The garbage truck manufacturer employs about 85 people. Terms of an existing labor agreement with UAW Local 838 remain in place.

In March, Goro said Wayne had been working to restructure its debt for more than a year, and was advised “it was in the best interest of the company, the community and its employees to file a voluntary chapter 7 to accomplish this.”

It manufactures garbage truck compaction equipment distributed worldwide, including its Curbtender brand equipment. Garbage trucks for both the cities of Waterloo and Cedar Falls use Wayne equipment.

The company successfully emerged from another Chapter 11 bankruptcy proceeding in the 1980s. That, and the firm’s relocation and expansion in the Cedar Falls Industrial Park in 1996, earned Goro Ernst & Young’s Iowa and Nebraska Entrepreneur of the Year Award in 1997 for the company’s turnaround. She was named Working Woman of the Year in 1996 by the Cedar Falls Chamber of Commerce.

Waterloo Courier Wayne Engineering