The Chronicle-Tribune posted today that Moorehead Electric, the company in contract with Chrysler, will be left with $9.6 million in the hole.  The news source comments that Congressman Burton was among the few that tried to assist the electric company in its initial heated battle with Chrysler.

By Brett Wallace
bwallace@chronicle-tribune.com
Published: Thursday, May 7, 2009 1:09 AM EDT
Moorehead Electric Co. is in the process of shutting down its operations after a long and proud 70-year history.

Employees and politicians say they’re saddened because the situation has come about through no fault of the company itself.

When Getrag suspended operations on the construction of its planned Tipton County facility in October, it left its 44 subcontractors on the hook for $45 million in unpaid invoices.

Getrag claims Chrysler, who had helped the German transmission maker settle on the Tipton location, owes that money to the unpaid companies. But Chrysler disagrees, and the two companies are now headed to court to settle the dispute.

Meanwhile, the 44 subcontractors have filed a joint suit in federal bankruptcy court but otherwise find themselves without rapid recourse.

For Jerry Albrecht, president of Moorehead Electric, it meant a gaping hole of $9.6 million in his company’s finances. Albrecht’s employees said he fought as hard as anybody ever could to find a way to keep the company operating. Ultimately, the task proved to be too much.

“We do feel there is a possibility of recovering the money, but it has to go through the bankruptcy court in Detroit,” Albrecht said.

In the meantime, Albrecht said, his bank and his bonding company lost faith that the company could recover the money owed to it and decided to pull the plug on Moorehead Electric.

“We finally had to close the doors because of the coordination between (the bank and the bonding company),” Albrecht said. “They basically decided to not continue support for the company.”

Albrecht said he also found it ironic that his longtime bank, Regions Bank, recently accepted federal TARP money and now is essentially forced to enact tougher lending standards, which Albrecht believes as a result put him out of business.

“As they did that, they tightened up on people like us,” he said.

Regions Bank President Ed Merchant said he cannot legally comment about the bank’s relationships with clients.

Many of the other companies suffering as a result of nonpayment in the Getrag project are facing similar peril, Albrecht said.

“Most of the (banks) that tightened up are the ones that got government money,” he said.

Albrecht also approached several other area banks but could not find a new business partner for Moorehead Electric.

Albrecht said he takes exception to the explanation reported in other media outlets that politicians have done everything they could to try to help his company, as well as the other 43 subcontractors.

“Dan Burton and Joe Pearson seemed to be the only ones who actually tried to help out,” Albrecht said.

Burton’s office took the lead on a letter sent to the leaders of Chrysler and Getrag in March. The letter, which was signed by five Hoosier congressmen, urged those company officials to assist the local contractors affected by the deal.

Burton, Grant County’s representative in the U.S. House, said he felt terrible after hearing that Moorehead is now scheduled to shut down.

“If (the federal government) is going to try to bail out Chrysler, they should try to pay what’s owed to the subcontractors as well,” he said.

Burton said he’s sympathetic to the plight of the subcontractors, many of whom are located within his congressional district, but added he doesn’t believe there’s any plan at the federal level to assist these companies. There’s been some talk in Washington of a federal bailout of the automakers’ suppliers, but not of subcontractors that worked for them, Burton said.

At this time, he sees bankruptcy court as the answer for the companies.

“But that’s the thing that worries me, that the bankruptcy proceedings are not proceeding as fast as they should,” Burton said.

...Burton said he hopes the former Moorehead Electric workers will utilize all of the community’s resources, including his office, if they need assistance.