Fairfield Ledger
https://fairfield-ia.villagesoup.com/p/1682835

Mt. Pleasant News   Wash Journal
Neighbors Growing Together | Sep 22, 2017

FALCO sold to Illinois firm

By Nicole Major, Ledger staff writer | Aug 28, 2017
Photo by: Nicole Major/Ledger Photos Nicole Farrier, former president of FALCO, speaks to the Fairfield City Council Friday.

Fairfield Aluminum Castings Company was sold today to Peoria, Illinois firm, Alcast Company.

This comes after FALCO was instructed by its main lienholder, a financial institution in Des Moines, to sell the company by mid-August due to the firm’s financial setbacks over the years.

“The bank forced us to go the sale route,” FALCO’s former president, Nicole Farrier, told Fairfield City Council members Friday afternoon during a special meeting.

The city initially held a secured second position, since in the 1980s, it administered a $600,000 Urban Development Action Grant to FALCO. Now, $65,000 of the debt remains.

During Friday’s meeting, Farrier asked the board to release the mortgage as a second lienholder.

Farrier said after that even after the sale of the firm, it wouldn’t have been enough to pay the city back after the bank is paid off.

Farrier said the bank forced an auction date of Aug 14, but that a “stalking horse bidder,” was named before that auction.

Alcast Company of Peoria, Illinois made the bid.

“At that point, all of the other bidders declined to participate, because they could not compete with the stalking horse bid,” she said.

Council member Tom Thompson inquired about the sale price and whether or not the city would be paid after the business sold.

Farrier said she couldn’t provide the sale price, but that she knew that there wouldn’t be enough funds to pay the debt the company owed to Fairfield after the sale.

Farrier told the council that the purchaser wouldn’t follow through with the sale if the company went “black” or filed bankruptcy, and that more than 50 jobs would be lost. She said that Alcast would only follow through with the sale if it was able to secure a clean title — meaning the city would have to forgo it’s second mortgage position.

After a prolonged discussion, council members unanimously approved a motion to release the city’s position as the second lien holder on the remainder of the debt.

City attorney, John Morrissey explained that although the city released the mortgage, the $64,000 debt would still be owed to the city.

During a later interview, Farrier, who accepted the role as president with the new firm, said that things went into motion directly after the special city council meeting.

“The sale is scheduled to close [today], and based on Friday’s council meeting, [Alcast] put signs up on the building with their name and logo. They are planning to sign the title [today]. This is very exciting for our workforce — this is a relief for our workers,” she said. “The amount of capital they invest in their facilities is absolutely amazing from what I’ve seen in their other facilities I have toured.”

She said 100 percent of the company’s jobs remain intact, no benefits were lost and no seniority was lost.

“They have assumed every employee contract under both buildings and in addition, we’ve hired a crew to start a second shift in Fairfield to start [this afternoon]. That’s seven new jobs,” Farrier said.

Farrier said Alcast is acquiring FALCO’s two locations, as the company had another plant in Clarence, Missouri.

“More than 50 jobs were saved here, but it was really over 70 jobs including Clarence,” she said.

Fairfield Economic Development Association executive director Josh Laraby weighed in.

“Job creation and retention are both primary initiatives for FEDA. With this, we’ve been quite active the last 60 days, two different Fairfield foundries have changed ownership quickly, both being forced to sell by their primary lenders. A lot of jobs have been involved. It’s been important for us to be directly involved to assist as we can, along with the City of Fairfield and our other community development organizations.”

The sudden ownership changes at two Fairfield foundries in the last 60 days are unrelated, and Laraby said both turned out favorably.

“The local economy remains strong and is growing,” he said. “We’re seeing notable growth and expansion in Fairfield. The manufacturing, health care, financial services and food science sectors are all growing. Firms are expanding facilities to accommodate this growth.”

Comments (0)
If you wish to comment, please login.