Council asks Intermet to repay stock
Ironton City Council members are requesting payment in full from Intermet officials to Ironton Iron investors.
Wednesday, December 22, 1999
Ironton City Council members are requesting payment in full from Intermet officials to Ironton Iron investors. In a letter to Intermet chief executive officer John Doddridge, council will ask for the immediate redemption of stock purchased by Ironton Iron employees when they reopened the foundry in the early 1980s.
"The letter is in response to the statement that Intermet will not pay the employees and investors who bought the stock in good faith," said councilman Bob Vaughn, who sponsored the resolution. "I am tired of reading that our area lacks educated and skilled workers. These employers and other investors deserve respect and they deserve to have this debt repaid."
In the letter, council members and Mayor Bob Cleary make several key arguments for the repayment, stating that "Intermet originally promised to repay in full all shares of Ironton Iron stock plus 5 percent once the plant turned a profit," and that "Intermet stands to record profits approaching $50 million for 1999 and is in a financial position to repay all shares of Ironton Iron stock in full."
Council member Jesse Roberts offered the only dissenting vote.
"I think when a government entity involves itself in business; it is doing wrong," Roberts said. "That is not to say I do not believe these people deserve their money. They most certainly do and I would like to see them have it."
Although Roberts himself invested in Ironton Iron as a college student with the purchase of one share’s worth of stock, he said he cannot support the resolution because it could complicate the possibility of future business in the city.
"When Doddridge or anyone else looks back they will see Ironton fighting for the wrong values," he said. "As a government entity, we cannot become involved in requesting this of a business. To do so could damage the opportunity to bring more business into the city."
While Ironton, as a city, has no legal grounds to request the repayment, council chairman Jim Tordiff said the resolution sends a message to the company officials.
"As we all know, a resolution does not carry any water," Tordiff said. "Legally, we can’t require them to (pay the stockholders), but we are simply requesting that they do so. All we are doing is saying we don’t think this is the right way to handle things."
Despite the lack of a legal claim, it is council’s obligation to speak out for the citizens, council member Joe Black said.
"I don’t want to argue semantics or technicalities, but there would not have been a plant to purchase if these original investors had not done what they did," Black said. "If we, as a government body, do not stand up and do something or say something on behalf of these people, we are doing them a great disservice."
If Intermet stands to gain from the city’s plant closure, then the citizens, workers and investors need to gain something as well, councilman Leo Ulery said.
"There’s so much greed out there in the corporate world and when you do these kind of things you get tax breaks from the IRS," Ulery said of Intermet’s decision to close the Ironton foundry. "I think there is a moral obligation to give that money back and that we are justified in asking them to do it."
In other business, council:
– Adopted the final revisions to the annual operating budget for the fiscal year ending Dec. 31.
– Passed a resolution honoring the 1999 Ironton Fighting Tigers football players, coaches, cheerleaders and marching band for outstanding representation of the city, both on the field and off.
– Authorized the mayor to sign a petition of the annexation of certain city-owned properties into the city limits.
– Extended, for a period of six months, the rent reduction put in place by council last year which reduces rent rates for business in the city building by half until such time as all vacancies are filled.
– Passed a resolution authorizing the necessary transfers and indirect cost reimbursements adopted by the 1999 annual appropriation (budget) ordinance.