London Fog offers plan to save jobs

September 26, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

An 11th-hour proposal to save the London Fog Corp. plant in Baltimore will be presented to union workers for a vote today, just weeks before the factory that employs 320 people is due to shut down.

But the proposal would not prevent the closing of a plant in Hancock, with 320 workers, and a Williamsport cutting facility, with about 60 employees, according to a source familiar with the offer.

Baltimore workers, who make a base wage of $7.60 a hour, would take a pay cut, the source said.

The offer from the Darien, Conn.-based raincoat and outerwear company comes a month after the ouster of Arnold P. Cohen, the company's chairman and chief executive for the past year. During his tenure, Mr. Cohen eliminated about half of London Fog's U.S. manufacturing plants and was set to close the last three in October.

"They've come up with something that I'm presenting to the people," said Carmen S. Papale, the regional manager of the Amalgamated Clothing and Textile Workers Union. "There is no agreement until the people vote on it."

Mr. Papale refused to release details of the proposal.

Asked if he was endorsing the plan, Mr. Papale said: "Let's say this is the best proposal the company could come up with. . . . I'm going to present it as the best way we can do it. Let's put it that way."

Edward Frey, executive vice president of operations for London Fog and its chief negotiator, also refused to give details but said the offer is vital to keeping some production of London Fog raincoats and other products in this country.

"Clearly, what we've attempted to do is to establish the viability of domestic production," he said.

To make the closings of the two Western Maryland plants more palatable, the company is offering "enhanced" severance packages to the workers to be laid off, the source said.

London Fog is also discussing with state and city officials a reduction of the rent at the Northwest Baltimore plant in the Park Circle Business Park and assistance in funding the training of workers in new manufacturing methods.

The 54,000-square-foot plant, which opened in May 1989, was built for London Fog by the quasi-public Baltimore Economic Development Corp., now called the Baltimore Development Corp., for $3.5 million. The building is leased to the company for about $24,000 a month.

If the proposal is accepted, the company will spend $2 million in capital improvements on the factory, Mr. Frey said.

But even with the changes, the cost gap between domestic and foreign production will remain, with the company paying an extra $4 million over the next two years, he said.

Mr. Frey said the success of the new effort could help boost work at the company's Eldersburg distribution and administrative operation, which has 500 workers.

"I'm very hopeful," he said. "Both the city and the state have every intention of working with us to give us the best chance of success."

Mark L. Wasserman, secretary of the Department of Economic and Employment Development, said the state is ready to help.

"All along we have assumed there would be some state role," he said. "We are ready to come to the table, but it will have to be in partnership with any jurisdiction involved.

"A meeting of the minds on the part of both labor and management would be a significant breakthrough," he said.

Robert L. Hannon, executive vice president of the Baltimore Development Corp., said that the agency has not been approached about a rent reduction. But he said that $2 million of the $3.5 million in financing for the plant came from the state and that any rent cut would probably involve reducing the city's payment on that debt.

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