USW: American Successes Growing

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USW Political Action Fund - Five Gateway Center - Pittsburgh, PA 15222


	American Successes Growing

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For years, Labour Sponsored Investments Funds have lent capital to Canadian businesses that have gone searching for capital. They have worked so well that they now control 51 percent of all capital investment funds there, representing about $6 billion.

Modeling their programs after those in Canada, union investment funds in the United States are starting to compile a convincing list of successes of their own.

A prime example is Republic Engineered Products LLC based in Fairlawn, Ohio, the nation's leading producer of high-quality steel bars. The company's products are used in demanding applications in the automotive, agricultural, aerospace, off-highway, industrial machinery and energy industries.

With approximately $1 billion of revenue and 2,500 employees, primarily USW members, Republic Engineered Products LLC operates plants in Canton, Massillon and Lorain, Ohio; Gary, Indiana; and, Lackawanna, New York.

The company, formerly known as Republic Technologies, was purchased out of Chapter 11 bankruptcy, in part, by KPS Funds. Part of the capital used was from Taft-Hartley multi-employer and public pension funds.

KPS Funds are private equity funds with over $210 million of committed capital focused on constructive investing in restructurings, turnarounds, and other as-needed situations. KPS joined another investment group to engineer the acquisition.

KPS also orchestrated a plan at Blue Ridge Paper Products (Asheville, N.C.) where workers traded a 15 percent wage and benefit cut for 40 percent ownership in the company.

Recently, the Pittsburgh Regional Heartland Fund, developed by the Steel Valley Authority, approved and closed its first pilot loan of $100,000 to a manufacturing firm in Johnstown, PA. The loan was made to Korns Galvanizing to assist the company in purchasing a new equipment.

The equipment has since been installed and will provide much needed process improvements to the small business. Johnstown is located in Cambria County, which has had one of the state’s highest unemployment rates, now in the range of eight percent.

In California, San Francisco-based UFO Communications, a broadband-services provider, secured $12.5 million last year through the assistance of Paladin Capital Group, a private-equity firm based in Washington, D.C., whose investors include Taft-Hartley pension plans.

Another example is Heartland Industrial Partners (unrelated to Heartland Labor Capital Network), an investment firm run by David Stockman, a former budget director in the Reagan Administration. The group engineered the takeovern Axle & Manufacturing, a Detroit-based auto-parts company. The deal saved numerous union jobs.