In the news:
Union vote looms at a top firm in Oregon
The Machinists seek an organizing victory at Portland-based aerospace supplier Precision Castparts; also, some state experts who track layoffs get laid off, and four years after failing, Westsound Bank is still a big financial crater.
Seattle Times business staff
About 2,300 employees of aerospace supplier Precision Castparts, Oregon’s second-largest company by revenues, will vote next month on whether to join the Machinists union.
It’s a big moment in a state where, like Washington, unionization rates are significantly higher than the national average but organized labor is struggling to hold its own.
The Oregonian newspaper reports the union push at 12 Portland-area plants is opposed by management of the fast-growing manufacturer of metal components for aircraft and industrial turbines. Precision Castparts overcame a similar effort in 1996.
The company employs more than 27,000 in the U.S., Europe and elsewhere, and has eight Washington facilities. Aside from Nike, it’s Oregon’s only Fortune 500 company.
Under an agreement signed last month, the National Labor Relations Board will supervise the secret vote by production and maintenance employees at the company’s PCC Structurals unit. Clerical and professional workers are not part of the bargaining unit.
The Oregonian cited an April 16 memo from management that laid out the company’s arguments against unionizing: “The stability and growth we’ve enjoyed as a union-free work environment sets us apart from other manufacturers ... This success makes us a lucrative target to a declining organization, which is mainly interested in its own financial benefit.”
But the newspaper reported that “this time Precision faces determined employees who say they’re fed up with working mandatory weekend overtime shifts on short notice, toiling in some cases for weeks or months at a stretch.” It quoted Precision worker Rod Scott, who X-rays aircraft parts to check for defects, who said managers penalize workers for taking sick days, change policies without notice, withdraw benefits and set impossible production targets.
The company told The Oregonian it wouldn’t comment.
Union members were 15.7 percent of the work force in Oregon last year, down from 17.1 percent the year before but still higher than the national average of 11.3 percent.
Precision Castparts has grown through a wave of acquisitions, including February’s purchase of 300-employee Protective Coatings, of Kent.
This past Thursday it reported record quarterly sales of $2.44 billion and a better-than-expected profit of $414.2 million, or $2.82 per share, which lifted its stock to an all-time intraday high of $211.89.
— Rami Grunbaum: email@example.com
State’s economists hit by budget cuts
The state’s unit for tracking unemployment is having to lay off a few of its own.
By early next month, the state Employment Security Department plans to slash the number of regional economists to six due to broader budget cuts in state government.
Historically, the agency had 12 regional economists, whose job is to monitor closely the labor market and industries in their territory. The agency says it currently has 10.
Once the layoffs take effect, Employment Security will have a single economist covering King, Snohomish, Skagit, Whatcom, Island and San Juan counties, said spokeswoman Sheryl Hutchison.
The agency now has one economist for King County, another for Snohomish, Skagit and Whatcom counties, and a third covering Island and San Juan counties.
Joe Elling, the state’s labor-market economist, left in February and Employment Security has no plans to fill the vacant position, Hutchison said.
The layoffs will show up eventually in the agency’s monthly employment report, which tracks changes in employment by industry. In the latest report, government led all sectors in job cuts, shedding 4,600 positions in March.
— Sanjay Bhatt: firstname.lastname@example.org
Westsound Bank still a big hole in FDIC’s pocket
Last week marked four years since regulators shut down Westsound Bank in Bremerton and sold its deposits to Kitsap Bank. The Federal Deposit Insurance Corp., which took over most of Westsound’s assets, still is owed millions of dollars.
As of March 31, the FDIC as receiver listed nearly $87 million in losses. That’s significantly lower than the $109 million in losses estimated when the bank failed on May 8, 2009. Losses can improve over time because of a healthier economy, higher property values and asset sales.
Not that lawsuits yielded much: The FDIC’s attempt to collect at least $15 million in damages from the bank’s former management and directors ended last November with the agency settling for a measly $1.7 million that was paid by their liability insurer. The case had been scheduled for trial this summer.
Once hailed nationally as an “all star” for its rocketing growth in home-construction loans, the Kitsap County bank crashed when the housing bubble burst.
The FDIC described in court, among other things, seven allegedly illegal insider loans that cost it at least $1.7 million. The loans were made to entities owned by bank insiders, including Westsound’s chairman, Louis Weir, and Brett Green, its executive vice president of sales and lending.
A Seattle Times investigation of insider lending at Westsound found that Weir and Green, through real-estate partnerships, repeatedly borrowed money from Westsound to buy land, subdivide it and sold lots to builders for speculative projects financed with more Westsound loans.
The investigation found a web of other loans to Green’s business partners, including a developer who transferred land to a Weir-Green partnership as a gift.
In response to questions from The Seattle Times, the FDIC said it decided to settle the case because that was the most cost-effective option. The law requires the FDIC to maximize returns to failed-bank receiverships — which often means settling for puny insurance payouts over a large court judgment with no chance of ever being paid.
The decision in the Westsound settlement took into account these facts, the agency said in a statement after the story was published:
• The bank’s $4 million liability insurance policy had dwindled, the agency said, to $1.6 million because of third-party claims and legal bills submitted by the five law firms defending the bank’s former officers and directors.
• The defendants had “few personal assets with which they were able to contribute to a settlement or upon which the FDIC could potentially have satisfied a favorable judgment.”
• The FDIC would have had to keep spending money to go to trial, “with no prospect of increasing the available recovery sources.”
— Sanjay Bhatt: email@example.com