[Congressional Record Volume 142, Number 53 (Tuesday, April 23, 1996)]
[House]
[Page H3701]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      CLOSING A PROFITABLE PLANT MAY LEAD TO A CHANGE IN THE RULES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Massachusetts [Mr. Frank] is recognized for 5 minutes.
  Mr. FRANK of Massachusetts. Mr. Speaker, this is a speech I was 
hoping I would not have to give. It is a speech I may have to repeat at 
greater length, and I hope I will not have to do that.
  In the City of New Bedford, which I represent, there is a plant, the 
J.C. Rhodes Co., which has been for a very long time a successful 
manufacturing plant, manufacturing metal fasteners, manufacturing some 
basic devices, and they have been profitable. We have heard a lot about 
American industry not being able to compete. Well, we have a plant here 
with an excellent dedicated work force. This plant has been around 100 
years, and it is successful and profitable.
  Recently the plant was bought, not by another primary metal producer, 
but by a financial organization. This financial organization then 
decided that it would shut down this profitable plant because they 
could make more money by shutting the plant down and consolidating the 
production at a plant in a different part of the country. They did not 
argue that it was a problem of lack of profitability. They did not 
argue there was no way they could make a go of it in Massachusetts. 
They did not argue it was because our costs were too high.
   Mr. Speaker, it was simply that because of the financial 
manipulations involved they now found it more profitable to shut down 
the plant. No one is asking them to lose money.
  I have not gotten into detail about the names of individuals; I hope 
there will not be a need to do that, because I do not want to interfere 
with negotiations going on now. But it would be a failure on my part 
not to make clear to all concerned what the stakes are.
  The stakes are these. We have a profitable plant in a part of the 
country where industry has, for a variety of reasons, been diminishing. 
Heavy industry. This plant is still profitable. It was bought. We have 
responsible, successful business people, themselves in the 
manufacturing business, working with the city government and the city 
of New Bedford, working with the union, the United Electrical Union, 
working with others, and they are ready to buy the plant at a 
reasonable price and keep it going. We are being told that we cannot 
have that, by some, not because this plant is not profitable but 
because, to be honest, some extremely wealthy people can add 
incrementally to their great wealth by throwing these people out of 
work.

  That is why this is so important. The question that America has to 
confront right now is, are we at a point in our economic system, with 
the rules that have been set forth legally and in every other way, in 
which the jobs of the 100 people and of families dependent on them 
count for zero; in which the fact these people have been working very 
hard for many years profitably for their employer counts for zero; in 
which the great costs that would be imposed on the city of New Bedford 
and the surrounding area, the city of Fall River and surrounding areas 
where these people work, does that count for zero solely so that some 
people who are already quite wealthy can become a little bit wealthier?
  They can increase wealth that will make no difference in their lives 
except when they chortle over the balance sheets.
  I am not asking anyone to take a loss or to keep open a building or a 
plant that cannot make it. I am saying that, if we are going to be told 
that the rules are such that this financial conglomerate can come in 
and simply buy up a plant and shut it down and throw these people out 
of work and have no concern for the disastrous financial consequences, 
no concern for the tax losses, no concern for the unemployment 
compensation that will be paid out, for the mortgage loans that will be 
defaulted, the student loans that will not be paid back; if the system 
allows a small number of people to get a little wealthier by causing 
this degree of financial havoc when the plant can make it on their own 
and people are willing to buy it and keep it running at a price that 
would be a reasonable price, then the rules have to be changed.
  Mr. Speaker, I have met with the owners of the plant, along with 
business people from my district, along with the union and people from 
the mayor's office working with our Senators, Senators Kennedy and 
Kerry. We are trying to persuade the owners to be reasonable, not to 
take a loss, not to subsidize anybody, but to tell us that the lives of 
these working people do not count for zero, that a marginal increment 
in their great wealth is not going to be the only factor. If in the end 
their answer is that nothing else counts in the balance, that nothing 
but their ability to maximize their already high profits will count, 
that all of the serious real economic costs that will be imposed on 
working people and on the city and on the State of Massachusetts, that 
those will count for nothing, then they are helping to convince me we 
have to change the rules.

                              {time}  1815

  I want the free market system to work. I do not want to interfere 
with it. But I cannot as a Representative sit idly by and allow the 
system to go forward if the consequence is that extraordinarily decent 
hard-working people are penalized and victimized solely for the 
financial gain of a small number of people with no real economic 
improvement for society. I hope I will not have to again be at this 
microphone on this subject.

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