Racine Steel Castings out of time and money, will close Friday

Racine Steel Castings out of time and money, will close Friday

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Journal Times

RACINE - Racine Steel Castings has run out of both money and time, and the 110-year-old foundry will close Friday.

The lender for the long-troubled foundry, Congress Financial Corp., has decided to no longer extend credit to the business owners, who are $8 million in debt.

The decision, expressed in Racine County Circuit Court Monday, means Friday will be the last day of operations for the foundry at 1442 N. Memorial Drive.

"There's an auction somewhere in the future for the equipment, and that's about it," Racine Steel Castings co-owner Jeff Renzoni said Wednesday.

He wasn't sure when that will happen. "That's between the bank and the receiver," he said.

"We all realized the best solution was to proceed the way we did," said court-appointed receiver Michael Polsky. He said it appears the equipment will be sold at auction and said that event would be at least several months away.

Early this year Renzoni and his partner, Tad Ballantyne - doing business as B & R Holdings - placed the business in receivership. Receivership, a declaration of insolvency, meant the assets were to be sold at auction.

There was an attempt to sell the business as a going concern, and manufacturing has continued there. But no buyer was interested in acquiring the whole company.

Given that, Renzoni said about Congress Financial's decision, "It wasn't a big surprise. What the lender is doing is what lenders do. They reach a point where they say, `We don't want to participate any further.' "

Nor were members of United Auto Workers Local 553 shocked. "I just figured (the owners) would milk everything they can milk out of it, and it was done," said union vice president Lorenc Gasparov.

Although 25 years ago the foundry employed1,500 workers. But just 50 were employed last week and about 35 this week.

Beyond that, the only workers at Racine Steel Castings would be those Polsky needs to get the business through the receivership.

Renzoni said declining markets gradually squeezed the life out of the company that he and Ballantyne bought out of bankruptcy in 1987.

"It's a large facility capable of doing a lot of output and meant to do a lot of output," he said. With the markets having declined, "It's very difficult to downsize something this size and have it make sense."

Early in the receivership action, Ballantyne had said he was considering buying Racine Steel Castings out of receivership and giving it a new start, with union cooperation. But he did not proceed with that idea.

"Where he went with that, I really don't know," Renzoni said, adding, "It was not for sure to begin with." Ballantyne was not available for comment.

Despite the dire assessment of the U.S. castings industry, Ballantyne reportedly said he and other partners have bought four foundries in the past six months, including one in Eastern Europe.

Dave Ball, Local 553 recording secretary, said Racine Steel Castings workers had been scouring the job market well before the final bit of bad news - mostly without success.

Workers have been without health insurance since the company dropped or lost coverage on Jan. 31. Lately the owners have been reimbursing workers for specific medical bills when presented with them.

Polsky said health claims up to Friday will be paid, but workers will not be covered beyond then. "We're still trying to make the best of a very difficult situation," he said.

Among the bills B & R Holding still owes is one for about $203,000 in unpaid water and sewer usage, although the owners have been on a pay-as-you-go basis for ongoing usage.


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