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Saturday, September 20, 2014
Amsterdam, NY ,

Trevor Junquera/Recorder staff The Fiber Glass Industries plant in the center of Amsterdam.

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Officials trying to minimize the blow in wake of FGI loss

Thursday, August 07, 2014 - Updated: 10:20 AM

By NICOLE ANTONUCCI

nicole.antonucci@recordernews.com

With the news that Amster-dam's Fiber Glass Industries is closing, officials said Wednesday they will continue to work with the company to minimize the impact on the city and Mont-gomery County.

Local and federal officials said they had been working with the company for several months to keep it from closing. Yet FGI announced that due to negative market conditions and overseas competition, it had no choice but to close both of its Amsterdam plants, which employ 120.

"I am shocked and saddened by this. It was my understanding they were working on getting financing and working out something with the county. This took me completely by surprise," Mayor Ann Thane said. "We are doing everything we can to minimize the blow, but a lot of it is out of our hands. It really wasn't local conditions that caused this. This is the global market."

FGI Chairman John Menzel had said the closing is a result of intense market competition from foreign manufacturers, which are able to sell products at a much lower cost than U.S. companies.

Thane said losing 120 jobs will definitely have an impact on the city, but Economic Development Director Robert von Hasseln said he is working with FGI's personnel to find jobs for the employees, mainly by relocating them to other manufacturers in the city.

"Our immediate concern is for the work force over there," von Hasseln said. "Our other concern is the on the disposition of the property."

Von Hasseln and other city officials said they are not concerned about finding a new tenant, as several businesses have expressed interest in the large facility on Shuler Street and Prospect Avenue, overlooking the city from its perch on the hill.

"I have had people say they would love to rehabilitate an old factory building into office and rental space," von Hasseln said. "I am going to call them up and tell them the building is now available."

He said they may be able to offer incentives since the building is historic. If the building were to go on the historic register, he said, the potential new owners would be able to get up to 40 percent of the rehabilitation work off federal and state taxes.

Amsterdam Industrial Development Agency CEO Jody Zakrevsky said the building on Edson Street may be harder to sell since it is specifically designed for the company with specialized equipment. A new company would have to make alterations.

"We plan on working with the county on marketing and putting together a financial incentive to attract another company," Zakrevsky said. "The county and us have been looking at the facility for adaptive reuse for other businesses. At this time we are in the exploratory phase. I am sure we will find tenant."

Von Hasseln and Zakrevsky said they knew the company was having some trouble, and were looking to sell the building.

"We thought there was more time," Zakrevsky said.

Von Hasseln said he knew employees who were providing him updates about what was going on. At one point, he said, people from overseas had toured the buildings and expressed interest. Then word came the deal fell through.

He emphasized that while FGI's closing is a blow, it is not proof that the city is heading toward an economic downturn, stating that there are several business that are growing.

"There is nothing we could have done about this. What the Chinese manufacturers are doing with the assistance of their government is exactly what the robber barons did here in the 1850s. They have driven the price so far down, in essence you are going to choke to death your competition," he said. "There is no amount of consolidated funding application of tax credits that is going to be able to counter-balance that."

During the past 28 years, FGI grew its annual sales from $7 million to $30 million, while increasing its glass strand output from 6 million pounds a year to 30 million pounds.

That growth was made possible, in part, by a 2010 licensing agreement with Owens Corning to employ new technology. FGI invested in 20 new looms and an "S" glass facility for incorporation of that technology.

However, despite that investment and growth, FGI has been running a deficit since 2008.

Montgomery County Economic Development and Planning Department Director Kenneth Rose said Tuesday that they had been working with the company on refinancing and restructuring finances, but it didn't work out.

However, Menzel said the company was also stymied in an effort to work out a sale to an undisclosed foreign buyer. The Committee on Foreign Investment in the United States made it impossible to approve the transaction, he said.

U.S. Rep. Paul Tonko, D-Amsterdam, said he was aware there had been delays with the decision by the committee, but didn't know the final result.

"There was a delay in the decision by the commission and they wanted us to push it along," Tonko said. "We were informed that one of the issues was that there was an industry that was sensitive to national security."

He said he had been working with FGI and was trying to get the necessary resources required to remain in Amsterdam. Part of that was to make the company more competitive, but Tonko said the manufacturing industry is not a level playing field.

He said the closing of FGI is further proof that the U.S. is losing manufacturing to overseas competition, an issue that Congress needs to address.

"We currently have a multi-billion-dollar package that speaks to bolstering manufacturing and addressing the unfairness that is out there," Tonko said. "Fair trade is where it is at. If there is unfairness in the equation we are going to be at risk at losing manufacturing jobs."

State Sen. Cecilia Tkaczyk, D-Duanesburg, said she will reach out to Menzel and union leaders to fully discuss the details of the closure.

"We've made great strides the last two years in supporting local businesses, but this closure shows that we have more to do on both the state and federal levels to protect American jobs and put more New Yorkers back to work," Tkaczyk said.

     

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