As former employees of First Marine Manufacturing Inc. staged a protest at the gate of the Fort McHenry-area shipyard yesterday morning to demand payment of back wages, First Marine President Dannie B. Hudson angrily yanked from the fence a hand-lettered metal sign reading "No pay, no more work."
The protesters charge that Mr. Hudson has manipulated the workers and their payroll to keep his bankrupt shipyard in operation.
"I think he's just getting people in here to do the work for free," said Myron Ashe.
Mr. Ashe, who said he is owed three weeks' pay, lost his job Thursday.
First Marine filed for protection from creditors under the U.S. Bankruptcy Code in July. Under the law, the company is permitted to operate while it tries to come up with a plan to pay off its debts and emerge from bankruptcy.
Even before the company filed, the workers experienced payroll problems. Some checks bounced in June. Most of the current employees are now owed three weeks' pay, a First Marine spokesman said.
Those at the gate charged yesterday that Mr. Hudson has been hiring people recently and then laying them off -- without pay -- at the end of two weeks, just when their first check would be due.
"He works people for two weeks and then lays them off," Steve Zakowski said.
"Twice now; it's happened twice," William Stewart said.
Martin O'Loughlin said he began working for First Marine two weeks ago after answering an advertisement. He was not laid off but decided against reporting for work yesterday.
"I would like to work, but not if I'm not going to get paid," he said. The best thing, he decided, was to stand at the gate and try to alert others to the pitfalls of working for First Marine.
Ed Fromm said he was hired Friday, the day after Mr. Hudson had laid off several other people. He said he decided to quit once he heard that people at the yard were not receiving all their pay.
Mark Allum, a spokesman for First Marine, said some mechanics were laid off Thursday. He said they had been hired to replace a crew of First Marine employees who had been sent to work on a ship subcontract at Bethlehem Steel's Sparrows Point shipyard.
Once that job was done, the workers returned to the First Marine yard, necessitating the layoffs of mechanics there, Mr. Allum said. Even though the company was laying off mechanics, it still needs to hire in other categories, including a cleanup worker hired Friday, he said.
Those who are still working at the yard had to file past the protesters as they reported for work yesterday. One of them who did not want to be identified said he was owed four weeks' pay. Asked whether he had any reason to expect he will get his money, he replied, "Nothing but his [Mr. Hudson's] word. That ain't worth nothing."
Mr. Stewart said the company has been juggling the payroll in other ways that worsen the effects of the withheld pay on employees. He said the company had paid him with a check covering a week in which he had worked only three days, while withholding checks for weeks in which he worked 87, 67 and 40 hours.
First Marine is repairing some landing craft for the Army, and Mr. Allum said Mr. Hudson had expected the Army to provide some funds Friday that could have been used to pay the men. That money was unavailable for technical reasons, but Mr. Hudson has been assured the funds will be forthcoming, Mr. Allum said.
For many of the people at the gate yesterday, one of the worst parts of working for First Marine has been the constant assurances about pay followed by disappointment.
One First Marine employee whom the protesters identified as the company's draftsman pleaded with the men yesterday to come through the gate and report for work. Saying the employees were "secured creditors," the man predicted that everyone would be paid, even if the company's assets had to be liquidated to provide the funds.
"I'm tired of hearing it," said one worker in refusing to enter the gate.
A. Grey Staples, an assistant U.S. trustee whose office is responsible for overseeing the First Marine operations while the company is in bankruptcy proceedings, has asked the court to force First Marine to liquidate by converting the case from a Chapter 11 to a Chapter 7 bankruptcy. A hearing has been scheduled for Oct. 25.
Mr. Staples said the liquidation request was filed in response to reports of the problems the company was having meeting its payroll and other obligations. The law prohibits a company trying to reorganize under Chapter 11 from incurring obligations it cannot hope to repay.
"They've got to keep current," he said. They company will have to convince the court that the payroll problems are not an insurmountable problem and that First Marine can eventually emerge from bankruptcy.
If the court is unconvinced and orders liquidation, employees still may not get all the wages owed them. Though workers take precedence over other creditors, funds raised through the liquidation will be used for "immediate payroll," Mr. Staples said. That means wages owed for the last few weeks.
"Part of what is owed [in wages] may not be a priority" under the court's repayment rules, Mr. Staples said.