Freedom Plastics will be placed up for sale
One owner said Tuesday he hopes no jobs are lost in Janesville and that the company can double its workforce when the national economy improves.
Freedom's 155 employees—including 86 in Janesville—learned of the pending sale Tuesday.
Freedom started a court-supervised receivership sale that should allow the company to operate without interruption until a buyer is found, hopefully as soon as March, said Freedom President Steve Scaccia.
Scaccia said Chapter 11 bankruptcy was rejected as an option because it's a long, costly process.
"Bankruptcy can go on for years, and the bank isn't going to fund you for years," he said. "The bank has agreed to fund us for five weeks.
"We believe this is the best option to get our creditors paid and preserve the jobs of our employees."
In 1987, Freedom filed for Chapter 11 bankruptcy protection after years of struggle. Scaccia teamed with local businessman J. Michael Borden and a handful of others to buy the company and pay off its creditors.
"That was a company that need to be rejuvenated," Scaccia said, referring to the company in 1987.
Now, he said, Freedom is "poised for great things."
Freedom supplies the wastewater, plumbing, irrigation and industrial markets. It's been walloped by a national downturn in housing and construction markets, as well as price increases in the resins used to make PVC.
The company has spent heavily on workforce training and in 2007 completed an $8 million expansion at its facilities on Arch Street.
"We put all of the money back into the company," said Scaccia, one of the company's owners. "We figured there would be a downturn in the industry, but we wanted to be ready for the rebound.
"Everything just fell off the cliff; this wasn't a normal downturn, and we got shelled."
Scaccia said Freedom is well positioned to be a dominant force in the economic rebound, especially as an infrastructure stimulus package makes its way through Congress.
"This is obviously a huge disappointment for Freedom's owners because the long-term future of this company is positive, given the quality of our people and products and the kind of infrastructure investment the country is about to make," he said. "But to preserve the company, we need to complete this process.
"As owners, we just don't have the time or the personal wherewithal. It's a complete loss for the ownership, but it's all about saving the jobs."
Scaccia said there are no guarantees a new owner would maintain jobs in Janesville.
But a smart owner would, he said.
"This plant has been perfectly maintained, is well-run and is recognized nationwide for its efficiency," he said. "Our assumption is that the new buyer would want to keep the people that made that happen."
Since its founding in 1976 in Janesville, Freedom has grown to include warehouses and plants located across the United States. It operates a total of 28 PVC pipe extrusion lines in Janesville and Fort Pierce, Fla., as well as a plant in Idaho.