Machinist Deb Bosworth, who has been with Lofthouse Brass for 17 years, is still finding lots to do in spite of the fact that the company is under bankruptcy protection.
BURK’S FALLS – Lofthouse Brass, a Burk’s Falls company employing about 130 workers for the manufacture of brass and aluminum fittings and parts, is under bankruptcy protection.
The company’s majority shareholder and CEO Bryant Brown has told the Almaguin News that market pressures have forced the company to seek protection from its creditors while it works to become a profitable business once again.
“It has been the perfect storm really,” said Brown. He says that over the past year his company has been faced with a Canadian dollar suddenly at par with the American dollar. Add to this a slowdown in the U.S. housing market that his plant manufactures many plumbing fittings for and the fact that the price of copper, the main ingredient in most of the components Lofthouse Brass manufactures, has increased five-fold.
The market pressures came to bear as the company was closing an older plant in Whitby, consolidating it with the state-of-the-art operation in Burk’s Falls.
“While doing that we ran out of cash and started to work with our bank. They want to get paid now,” said Brown.
To that end, Brown says his lenders and Lofthouse Brass are working together on a plan to solve about $11 million in debt under the Companies’ Creditors Arrangement Act, commonly referred to as bankruptcy protection.
Brown says he hopes the end of the process will see him pass ownership on to another party.
During the process, however, the Burk’s Falls Lofthouse Brass plant remains busy. General manager Darwin Dunn says that all shifts are still running and that the company is actually hiring at the moment.
Employees are close to completing consolidation of the Whitby operation into the local one, something they’ve been doing for the past three months. Dunn points to a number of machines and other equipment that have be reinstalled in Burk’s Falls as well as other more mundane items like filing cabinets.
Besides overlooking the consolidation, Dunn says he’s recently been spending a lot of time on the floor of the plant letting employees know what is happening. He says he has confidence the plant is going to pull through.
“I’ve been here 11 years. This plant has been profitable that whole time and it will continue to be. It’s not a situation where this plant is unprofitable, it’s just the company is in a bad situation overall,” said Dunn.
He says he believes the plant is still in a great position to remain profitable, pointing to the big multi-chuck lathes that are churning out finished components at a rate of one every nine seconds.
“We don’t go head to head with the Chinese. We do very complex components very well,” says Dunn walking by a set of machining tools measured down to the 1,000th of an inch.
At the moment the quality assurance teams are working hard to get components previously manufactured in Whitby back into production. Because of the move, sample batches followed by thorough measuring and a customer approval process have to be completed on hundreds of different items.
Brown says it is the employees who are making the future of the plant look bright despite the dark circumstances the company finds itself in.
“The true light in the tunnel is the quality of the work that is being done in Burk’s Falls. There’s only one other place in the world capable of doing what they do there and that is in northern Italy,” said Brown.
Dunn echoes the sentiments, adding, “Always your job security comes down to customer satisfaction and profit and we need to concentrate on making good parts and shipping them on time.”
Dunn says interested parties have already come forward to inquire about purchasing the plant.
“There are people interested because of what you see out there,” says Dunn motioning to the plant floor.
Asked for specifics on a timeline for finding a solution/new owner for the operation, Dunn and Brown have more vague answers.
“Things are lining up fairly quickly,” said Dunn. “. . . but that fairly quickly might be two months.”
For Brown, who has had an interest in the company since 1991 and been the majority shareholder since 2000, the events that have led the company to this point still seem to shock him.
Asked if the company has ever faced this level of difficulty, he’s quick to answer, “Absolutely never. The number of circumstances that have come together is just staggering. I mean, I’ve seen the dollar fluctuate plenty over the years, but never go up 30 per cent in a less than a year.”
The ‘perfect storm,’ as Brown puts it, forced the closure of the plant in Whitby five weeks ahead of schedule. Workers there, some employed as long as 31 years, are being told they may not get any severance pay.
Brown says those employees are on the list of creditors, but are behind the banks and legal and accounting professionals handling the bankruptcy protection.
Asked what assurances he could offer that the same thing won’t happen in Burk’s Falls, Brown says, “None. But without this process what assurances would they have?”
Lofthouse Brass employs 130 people, coming from as far away as North Bay and Huntsville to work in Burk’s Falls. Over 80 per cent of the market for components manufactured is in the United States.
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