OMC workers left out in the cold

Last pay checks: Company seeks bankruptcy protection

   WAUKEGAN — As laid-off Outboard Marine Corp. employees lined up at the company's security office to get their last paychecks in bitter cold Friday, the firm was seeking bankruptcy protection in a federal courtroom in Chicago.

   OMC filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code.

   The Waukegan-based company said it plans to sell some or all of its engine and boat operations but expects to continue operations during the reorganization process.

   OMC requested the U.S. Bankruptcy Court to allow the company to continue compensation and benefit plans for its remaining employees, to make payments due to supplies and to maintain customer sales, support and service activities.

   The company said it has received a commitment from its bank group to provide financing totaling $35 million while OMC implements its restructuring plan.

   Company officials were unavailable for comment, as was the firm's bankruptcy attorney.

   Still, workers were at the company's lakefront facility on Friday, getting what could be their final paycheck from OMC.

   "I picked up my check this morning," said Jim Baker, vice president of the Independent Marine and Machinist Association, the union that represents production workers at the OMC Waukegan plant.

   "I don't know where my next check will come from," he added.

   OMC, once a leader in the recreational marine industry with brand names like Johnson and Evinrude motors, shut down its operations Thursday. In Waukegan alone, it laid off 1,190 employees in its headquarters and a die-casting plant. Massive layoffs were made in its plants in Cadillac, Mich., Calhoun, Ga., Manatee County, Fla. and other locations simultaneously.

   The wholesale, companywide layoffs days before Christmas caught employees by surprise even though they were aware of the fragile financial conditions the company was facing. In a letter to employees, the company pointed to its disappointing operating performance and the difficulty in obtaining additional financing.

   The letter said the company had no choice but to "shut down our operations indefinitely and regrettably let go many of our valued employees."

   The news blackout by the privately held company had spawned rumors and speculation, including the eventual bankruptcy filing, and attempts by the owners to sell the company either in part or in whole.

   The lack of a timely announcement on the company's status frustrated dealers, suppliers and investment groups as well. They said they couldn't get their calls through to the company. Efforts to reach company spokesmen by The News Sun were unsuccessful.

   A dealer in Virginia said he is fearful that the shutdown, even a temporary one, may make it difficult to meet demands for engine parts by his customers. An investment group in Los Angeles, which has a stake in the company, told of futile efforts to reach the management.

   The man, who preferred anonymity, attributed the company's problems to "poor management."

   Bill Reidel, president-emeritus of the Lake County Chamber of Commerce, said Friday, "It's sad to see the once-thriving company being so weakened."

   "This is one of the oldest corporations in Lake County," he said of the 64-year-old company headquartered on Waukegan's prime lakefront.

   Reidel, president of the $250 million Consumers Cooperative Credit Union based in Waukegan, said while it is unfortunate for those employees being laid off, jobs remain plentiful in the area.

   "The upside is that there are jobs to be found," he added.

   Sherry Kurtis, spokeswoman for the Illinois Department of Employment Security, said laid-off workers may apply for jobless compensation at the department branch office on the College of Lake County campus at 800 Lancer Lane in Grayslake. For those seeking jobs and retraining, they should visit the Private Industry Council of Lake County at 415 Washington St., Waukegan.

   The shutdown of its operations in Waukegan has led various groups to speculate on the future of OMC's prime lakefront property.

   Russ Tomlin, director of Waukegan economic development, said Friday the sprawling lakefront property presents an opportunity for the city to develop it as part of an overall package for a tourist and commercial complex, if the shutdown becomes permanent.

   "As a community, we never like to see old jobs lost," he said.

   He added that if the property becomes available, it would enable the city to reposition itself as a possible tourist-service industry community.

   "It would present us an opportunity for long-term reuse of the lakefront. Thousands of jobs could be created as a result."

   Observers, however, point to the potential cleanup problems a developer of the property may face.

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12/23/00