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U.S. Sen. Tammy Baldwin presses Hufcor owner to pay Janesville workers' severances

JANESVILLE—U.S. Sen. Tammy Baldwin is going to bat for dozens of former Hufcor workers in Janesville, whom she and labor union officials say never got the severance promised them by Hufcor’s now bankrupt owner.

In a letter Monday to OpenGate Capital, Baldwin decried the private equity firm’s decision to renege on health insurance coverage it had agreed to as severance for some Hufcor employees. The company laid off the employees last year as it outsourced the entire Janesville factory operation to Mexico.

Baldwin, a Democrat, asked OpenGate CEO Andrew Nikou, the founder of the Los Angeles-based equity fund, to “stand by its agreement” to provide health insurance and other payouts for the Janesville workers, who were members of a small local labor union.

“As a result of your mismanagement, dozens of former Hufcor workers—some of whom have life-threatening illnesses—are without health coverage,” Baldwin wrote “Others never received the retention bonuses they were promised in exchange for continuing to work for the company after you announced that the Janesville facility would be closing.”

OpenGate went into bankruptcy receivership earlier this year, shortly after a group of about 28 workers said they were abruptly laid off in April. They were the last of 166 factory workers, some who had been there for 25 or 30 years, who built moveable wall systems for Hufcor. The Gazette could not reach former Hufcor employees for comment Monday

OpenGate bought Hufcor in 2017 and soon after began winding down operations in Janesville, where Hufcor was born 120 years ago.

The company kept on a small number of workers, but began rolling out layoffs in the fall of 2021, agreeing on a plant-closing agreement with the IUE-CWA, a local Communication Workers of America union representing Hucor workers.

That agreement had a provision requiring Hufcor to pay health insurance premiums for workers who kept company coverage after their layoff, IUE-CWA union representative Richard Shorter told The Gazette on Monday.

Shorter said that in June, just as a Rock County judge granted a petition for bankruptcy receivership, which is a legal mechanism to dissolve a company and parse out its remaining assets, Hufcor abruptly ended its agreement to pay out health insurance for the last workers it had laid off.

Hufcor and OpenGate are now being named in dozens of claims through the receivership, ranging from unpaid vendors to a church that had put down more than $75,000 in deposits for moveable wall systems that Hufcor never delivered on.

The company had planned to move its Janesville manufacturing to Monterrey, Mexico, but records show it now has years’ worth of rent agreements at the Mexican plant property that are expected to go unpaid.

OpenGate has a long history of bankruptcy actions that have left workers laid off without severance—including the 2013 closure of the Golden Guernsey dairy in Waukesha that left workers locked out of the plant with their personal belongings still inside.

Baldwin met in the summer of 2021 with Hufcor workers in Janesville, and later pressed the company to provide severance assurances for those who’d become displaced.

Baldwin has also ntroduced legislation she calls the ‘Stop Wall Street Looting Act.’ Her office says it is aimed at curtailing tax and regulatory loopholes that allow private equity funds to cash in on the benefits of owning companies while passing risk to the companies they own.

Baldwin wrote in the letter this week that OpenGate should hit the re-set on its agreement and make things right by paying out former Hufcor employees, some of whom she said now can’t afford the medicine they need.

“I write to ask you, as the CEO of OpenGate Capital, to stand by the agreement your portfolio company negotiated with its employees,” Baldwin wrote. “Restore their health coverage, pay them for the work they’ve done, and make them whole for any losses they’ve suffered as a result of the bankruptcy that you caused.”

Pall bearers carry the coffin of Queen Elizabeth II with the Imperial State Crown resting on top into St. George’s Chapel in Windsor, England, on Monday for the committal service for Queen Elizabeth II. The queen, who died Sept. 8, was buried at Windsor alongside her late husband, Prince Philip, who died last year. More on Page A7.