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It has been brought to my attention that the Department of Housing and
Urban Development has received two applications for Urban Development
Action Grants which, if approved, could have serious and adverse
economic consequences for my district.

An application has been submitted by Wilmington, North Carolina and
will be submitted by a city in Alabama which would facilitate the
relocation of the crane manufacturing operation of American Hoist and
Derrick Company. Amhoist is a well established firm that has been in
St. Paul for over 100 years and presently employs 530 workers. It is
my understanding that the Wilmington and Mobile applications
contemplate using the UDAG to transfer the Amhoist crane manufacturing
operation and most of the jobs from St. Paul to these new locations.
As you know, Section 119 (h) of the Housing and Community Development
Act of 1974, as amended, specifically prohibits the use of UDAG funds
for relocation of an existing facility. Your evaluation of these
applications should include an investigation as to whether these
projects would violate the provisions of Section 119 (h).

The people of St. Paul, Minnesota, our business community and the city
have benefited greatly from the UDAG program. However, our success
has been the result of a business, labor and government partnership
which has worked hard to create new industries, new jobs and new
businesses. I expect that you will impose the same job creation
requirements on the Wilmington and Alabama applications as you have
required from St. Paul for our UDAG projects.

I appreciate your attention to my concern on this matter, and I look
forward to your response.

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Thank you for your letter of August 24, 1984, regarding your opposition to UDAG applications from Wilmington North Carolina and a city in Alabama. My staff is looking into the matter and we will provide you a full response as soon as possible.

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***F OF THE ASSISTANT SECRETARY FOR ·MMUNITY PLANNING AND DEVELOPMENT

WASHINGTON, DC. 20410

SEP 25 1984

ilonorable Bruce P. Vento
House of Representatives
Washington, D.C. 20515

Dear Mr. Vento:

Thank you for your August 24, 1984 letter to Secretary Pierce concerning an Urban Development Action Grant (UDAG) application submitted by the City of Wilmington, North Carolina and a proposed application to be submitted by the City of Mobile, Alabama.

Review of these applications will include a careful investigation of the possible relocation of jobs from St. Paul. HUD will not violate Section 119(h) of the Housing and Community Development Act of 1974, as amended.

Sincerely,

L

Ronald G. Dodge

Deputy Assistant Secretary
for Program Management

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I am writing to you concerning the recent U.D.A.G. grant awarded to Wilmington, North Carolina for the location of an Amhoist crane manufacturing operation.

As you are aware, I have been most concerned that the application and award of this grant would result in the relocation of an existing St. Paul facility with a signficant loss of jobs. Such a development would be in clear violation of Section 119 (h) of The Housing and Community Development Act of 1974, as amended.

Initially, serious concerns did exist which caused your Department to hold this grant for review. Only after the enclosed exchange of correspondence between my office and Amhoist was shared with the Department were these concerns mollified.

In its November 28, 1984 letter to me the Chief Executive Officer at Amhoist made a commitment that "at least seventy-five percent of the 763 crane related jobs traditionally and presently performed in St. Paul will remain here." Based on this letter, and other HUD/UDAG requirements, the Department proceeded with the U.D.A.G. grant.

January 11, 1985, Amhoist announced the intended layoff of over 500 St. Paul employees and the intent that future crane manufacturing occur only outside Minnesota. The impact of this layoff and future plans, as reported by the enclosed news reports, are not in agreement with Amhoist's commitments. Based on a January 15 conversation I had with Mr. Nassau, Chief Executive Officer for Amhoist, it is clear that the Amhoist letter of November 28, 1984, was misleading. In that letter Amhoist failed to make it clear that 300 current positions in the St. Paul "locomotive crane" production were excluded from the number of crane related jobs.

The 500 person layoff proposed by Amhoist will have a significant impact on the St. Paul economy. In effect, the St. Paul facility will not retain a crane manufacture capacity, the existing fabricating, assembly, shipping, and locomotive crane manufacturing and the related 500 jobs will be phased out in the next 8 weeks.

Mr. Secretary, the Wilmington Amhoist U.D.A.G. grant is a violation of the provisions of Section 119 (h), as amended. The Amhoist submitted information and responses to our request for future plans and the numbers as they affect jobs and operations in its St. Paul facility have not revealed their true intent or impact. Your Department, the Mayor of St. Paul and I have tried to work with Amhoist to determine the full and complete impacts on the St. Paul facility and compliance with the law. However, we have never been provided with the full details nor clear data from Amhoist. In the Amhoist letter of September 12, 1984, to Mr. William Farris, City Manager, City of Wilmington, Mr. Nassau stated that twenty-five to thirty jobs would be transferred to Wilmington. This letter was included in the Wilmington U.D.A.G. application request and the twenty-five to thirty figure was used by your Department for the Section 119 (h) determination. In response to my letter of November 15, 1984, Amhoist stated a job loss of no more than twenty-five percent of 763 current St. Paul jobs or 191 jobs. Now Amhoist has announced layoffs of nearly 500 existing jobs in St. Paul as a result of this move, a figure that is twenty times greater than the original job loss figure provided to HUD. Furthermore, this new Amhoist information and its actions make it clear that the locomotive crane manufacture now performed in St. Paul, is scheduled to be relocated in Wilmington.

In light of this significant disparity, I strongly urge your Department to review the Wilmington U.D.A.G. award to determine the true impacts of this grant upon the Amhoist St. Paul facility and to take all possible and appropriate steps to insure compliance with the law. Since Amhoist is initiating and planning these layoffs over the next eight weeks, your timely response is essential.

Sincerely

Price

Bruce

Bruce F. Vento
Member of Congress

BFV/cm

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