Thank you for your letter of January 17, 1985, concerning the Urban Development Action Grant awarded Wilmington North Carolina for the Amhoist crane manufacturing project. My staff is looking into the matter and we will provide you a full response as soon as possible. Very sincerely purs amwelk Samuel R. Pierce, Jr. Thank you for your letter of January 17, 1985 requesting further review of the Department's Urban Development Action Grant (UDAG) award to Wilmington, North Carolina for the Amhoist facility. The additional information you have brought to our attention regarding possible violation of provisions of Section 119 (h) raise important questions. UDAG staff are currently conducting an in-depth review of this project with particular attention to the cause-and-effect relationship between the UDAG funded Amhoist facility in Wilmington and Amhoist's announced closing of the St. Paul facility. The review will be concluded shortly and the results will be communicated to you as soon as they are available. I appreciate your interest in this matter. Ver sincerely yours, Something Samuel R. Pierce, Jr. We are writing to bring to your attention new evidence we have received which has a direct bearing on the Department's investigation of the Wilmington/Amhoist Urban Development Action Grant. This information clearly demonstrates that Amhoist intends to use proceeds from this grant to relocate jobs from St. Paul to Wilmington. The accompanying information are internal company documents which were received by Congressman Vento's office. The information includes crane production schedules for the Amhoist Wilmington plant. As you can see, during the next 10 months Amhoist plans to produce 27 cranes from the Z00, 800 and 200 series in Wilmington. In the absence of this grant, all of these cranes would be produced in St. Paul. We believe that this information provides the Department of Housing and Urban Development with incontrovertible evidence that Amhoist intends to use the grant to relocate its crane production facility from St. Paul to Wilmington, North Carolina. We feel Amhoist has not been candid with the Department nor with Congressman Vento concerning the possible relocation of the St. Paul plant and its jobs. In its July 30 U.D.A.G. application, Amhoist stated that 25 jobs will be transferred to Wilmington. On November 28, Amhoist wrote in response to a letter from Congressman Vento that 75% of the crane related jobs would remain in St. Paul. Finally, on January 11, Amhoist publicly announced that all crane related manufacturing, production, fabrication and assembly jobs would be lost. Fully 500 St. Paul workers, virtually the entire St. Paul plant crane assembly work force, are scheduled to be out of a job by April 1. In six short months, the projected job loss in St. Paul, as a direct result of this grant, has increased by 20 fold. The public announcement of January 11, combined with the Wilmington production schedule, clearly shows that Amhoist has every intention of continuing production of cranes which have been built in St. Paul. The 700, 800 and 900 cranes will continue to roll off the assembly line. In fact, these cranes will be made with the machinery and equipment from the St. Paul plant which Amhoist is moving to Wilmington. As a result of this U.D.A.G., these cranes will be built in a federally assisted facility in Wilmington and the skilled men and women who previously made these cranes will be standing in the St. Paul unemployment lines. Amhoist undoubtedly wishes to gain economies of scale and consolidate operations in order to produce a less costly product. These are understandable corporate goals. The purpose of the U.D.A.G. program is not a manufacture consolidation program, but rather a job creation program. These actions cannot legally be accomplished with U.D. A. G. funds. As you know, there is nothing which prohibits Amhoist from moving its entire St. Paul plant to Wilmington, North Carolina, if it is totally privately financed. However, Amhoist has solicited direct federal government assistance for its new Wilmington plant. There are specific clear conditions under which they receive this federal help. The anti-pirating provision of 119 (h) is one of the conditions specified by the law. Other communities and companies have made excellent use of this program and have obeyed the spirit and letter of the law; Amhoist Corporation is required to do no less. As Chairmen and members of the Committee and Subcommittee of jurisdiction for H.U.D. and the U.D.A.G. program, we believe this information raises serious questions concerning the Department's policies designed to insure that U.D.A.G. recipients comply with the requirements of 119 (h). Since August, Congressman Vento has repeatedly raised these concerns to the Department and with Amhoist Corporation. The Wilmington U.D.A. G. application contained a actual list of equipment which Amhoist is moving to the new Wilmington plant. More than 90% of that equipment is to be removed from the St. Paul piant. Congressman Vento's office even provided documentation to show that the serial numbers of this equipment matched the equipment now in use in Amhoist's St. Paul crane manufacture facilities. The transfer of this equipment leaves the St. Paul plant without any crane production capacity. Despite the fact that the Department possessed this equipment list, preliminary approval was given for this grant and has continued! Congressman Vento's January 17 letter and the Amhoist's public announcement of January 11 provided the Department with irrefutable evidence that the entire crane production operation at St. Paul would be shut down. The information accompanying this letter documents that Amhoist intends to relocate production from St. Paul to Wilmington. We have shown that Amhoist: (1) is moving the equipment from the St. Paul plant to Wilmington; (2) that the St. Paul plant is to be closed; and (3) that the production previously occurring in St. Paul will be transferred to Wilmington. What more evidence does the Department need to rescind this grant? The documentation which Congressman Vento has provided to the Department is exactly the kind of information which the Department should compile itself. The Department of Housing and Urban Development, not Congress, is charged with enforcement of 119(h). Unless the Department has obtained information which it has not shared with Congress, we feel the information the Department has received from us is sufficient to warrant the cancellation of this grant. |