Steven L Gurba the former owner of Bulova and still president under Stanton Lied to the Court to screw his workers out of their proper compensation. In this report Gurba tells the court that Bulova is completely and totally dissolved and yet you see them here amongst you ! Hallelujah! Bulova has risen!
Jobs, benefits lost, and now lack of trust Tue. January 20, 2009; Posted: 03:47 PM Lancaster Pa The employees' union has sued to obtain wages, medical benefits and severance pay lost when Lancaster's Bulova plant abruptly went belly up last month.
But Stephen L. Gurba, the CEO, says the union doesn't know the facts. He claims he will pay wages up to date and he is negotiating to restore health benefits.
"The company's commitments to the employees will be met," he says.
Union members remain skeptical, and as one of the city's most venerable business names passes into history, the bitter dispute affects the lives of dozens of Lancastrians.
When Gurba announced the imminent closing of Bulova Technologies LLC in early December, he shocked the community as well as the union.
An outgrowth of the 19th century Bulova Watch Co., Bulova has specialized in recent years in manufacturing electronic products for commercial and defense contractors.
The company sold about $40 million in products a year. A sister Bulova plant, in Melbourne, Fla., posted annual commercial and defense sales of $60 million.
Gurba proposed to sell both plants to another Florida company -- BT Acquisition Co. LLC, Clearwater -- which would then operate three manufacturing plants in Florida.
This news surprised 40 members of Bakery, Confectionery, Tobacco Workers and Grain Millers local Union 387 -- the workers who assembled the electronic components in the Bulova plant at 101 N. Queen St.
They knew Bulova had been struggling to make ends meet. They did not know until two weeks before Christmas that they had lost their wages and benefits.
Ten salaried employees went on working in the plant, according to former employees. They worked without compensation, with the expectation that they would move to Florida and work for BT Acquisition.
Most of these salaried employees quit Jan. 9. They say they don't believe the jobs that were promised are real.
Workers at the Melbourne plant -- one of the three plants that will operate under the new company -- have been laid off since early December. That plant should reopen Tuesday, according to a recording on the plant's telephone line.
BT Acquisition was having problems financing purchase of Bulova as of late last week, according to a Brevard County newspaper, Florida Today. That was holding up reopening of the Melbourne plant.
"I don't know who I work for," says James McGuire, a salaried manufacturing engineer who quit the Lancaster plant. "Gurba has grandiose plans. The problem is his ability to implement those plans. I don't trust him."
Trust began to break down early last year when Gurba laid off about half of his 100 employees in Lancaster.
In the summer, the company stopped for a time making payments to its health insurer, Pennsylvania Blue Cross/Blue Shield. That problem was resolved.
Then, at the end of November, some paychecks began bouncing.
On Dec. 1, employees say they asked payroll personnel what was going on and were informed there was insufficient money to pay them.
Company officials also said their health insurance premiums had been paid only through the end of September and their insurance had been canceled Oct. 31, even though they had continued paying their portion of the costs.
Former employees complain that Gurba himself never discussed any of these things with them.
On Dec. 12 union employees received a terse notice from Bulova management immediately terminating them. All payroll checks, the notice said, would be mailed to their home addresses.
But union workers are still looking for those checks. Gurba says money was made available Friday to pay all hourly wages, but union members say they haven't seen it.
No one has received health care benefits since Oct. 31. Some September and October health care bills also are in dispute.
"Now some of us have $5,000 or $3,000 in medical bills that he didn't pay for," says union member Paula Graybill. "He took our money and didn't pay for our benefits."
During an hour-long interview last week from his primary residence in Tarpon Springs, Fla., Gurba maintains he did not want any of this to happen. Furthermore, he claims, everything will be set right.
"All payrolls will be caught up within the next 10 days," he says. "We are negotiating with Blue Cross to get the balance of health care covered from November on."
Gurba claims the outstanding hourly and salaried payroll costs are under $100,000 and health care costs are about $393,000.
The new company will pay the payroll and is negotiating with Blue Cross to cover the insurance, according to Gurba. John Stanton, of Tampa, Fla., owner of BT Acquisition, is involved in the negotiations.
Gurba says Stanton has asked him to serve as president of the new company, which gives him leverage to obtain wage payments for former Bulova employees in Lancaster.
And if Blue Cross doesn't come through, Gurba suggests, he might apply some legal pressure. He claims the insurance company didn't live up to its contract for part of last summer.
"My real goal is to resolve all of this so that everyone can look forward as painlessly as possible," he says.
On Dec. 16 -- four days after employees received their termination notices -- the union filed a federal lawsuit demanding payment of all wages and benefits.
The suit claims Bulova "is intentionally undercapitalized" and funds are being diverted from Bulova to other Gurba companies or interests.
It says Gurba told the union he did not intend to make payroll or benefit payments, including severance pay, as stipulated in the union contract.
It claims Gurba has used employees' medical insurance payments for other purposes, leaving them without benefits.
As a result, the suit notes, union members "have been in some cases deprived of life-saving surgeries and treatment for cancer, diabetes and other conditions, and in other cases have had to shoulder vast out-of-pocket expenses for treatments and medications."
The suit requests a judicial order restraining Gurba from selling the company until it has satisfied the union's demands. A supplemental memorandum requests that the court freeze Gurba's personal assets as well.
The court turned down all requests Dec. 19 after finding that Bulova had been "permanently and completely dissolved" on Dec. 16, thus rendering the request moot. The court also refused to freeze Gurba's assets.
But Weinstock has asked the court to reconsider based on the grounds that Bulova has not truly been dissolved and Gurba is moving assets among several companies he owns to avoid making required payments to union employees.
From his Harrisburg office, Weinstock says nothing Gurba has said indicates he will provide relief for employees.
"He says he's going to work this out," Weinstock says, "but nothing has been worked out."
Gurba claims that what happened is not his fault. A sour economy, overpaid union workers and cheap foreign competition put him in a hole, according to his account.
"The company's had financial difficulties for two years," he explains. "Our financial situation was week to week. The bank had the ability to pay certain payables and no others."
The bank is Webster Business Credit Corp., a Manhattan-based affiliate of New England-based Webster Bank.
Gurba says he owns the Bulova building but Webster wound up owning the business. Large loans gave Webster the ability to call the shots, according to Gurba's account.
"We were writing checks to Blue Cross but Webster Bank didn't honor the checks," Gurba says. "They didn't honor the checks because they were saving money in anticipation of a foreclosure."
By Gurba's account, he didn't know any more than any other employee of Bulova about what the bank would do and when. He has the same health insurance, he says, and had it cut off.
Webster ultimately took over Bulova under a Uniform Commercial Code Article 9 foreclosure, Gurba says. Webster then sold Bulova to Stanton's company.
Gurba says the new company is willing to pay back wages and health care benefits for Lancaster workers in order to ensure that its Florida workers remain happy.
Retirement funds paid by Lancaster's employees at 3 percent of their hourly wage are safe in a state-guaranteed program, he says, though he cannot name the program.
But Gurba says severance pay -- one week's wages for every year employed, according to the union contract -- will not be paid. Many workers have been employed for 20 or more years, so the amount would be substantial.
"The company has no assets and no ability to pay a severance. The lawsuit is misguided," Gurba says. "I didn't close the company down. The bank did. If the folks need severance pay, they should be pursuing the bank."
Informed that Gurba is shifting responsibility for Bulova's distress to the bank, a spokesman for Webster Bank considered the situation.
"We won't be able to comment in any detail on this customer's case," says Ed Steadham. "So if you just want to put down 'no comment' for us, that's fine."
Judith Tomlinson, a 27-year Bulova employee, has throat cancer. The company's Blue Cross insurance paid for chemotherapy and radiation. Her doctors thought they had eliminated the disease.
The doctors ordered a Dec. 9 test to determine definitively if all cancer is gone. The test costs $3,700.
When Blue Cross denied the test because Bulova no longer has an insurance plan, Tomlinson was dismayed. She had been paying health care premiums and assumed she had insurance.
She can't afford the test. She's looking for a new job. She wonders if she still has cancer and worries about the future.
Other union members have canceled doctor appointments or failed to fill prescriptions because, without weekly paychecks and insurance, they have no way to pay.
James Murphy, manufacturing engineer, says salaried workers are in the same fix. No job and no health insurance.
He has moved to his wife's health care plan, he notes, but others have not been so fortunate. They have purchased personal insurance at high rates.
"Some people had medical procedures done when they thought they had insurance and then found out they're liable to pay for it," he says.
Even if Gurba had no control over the medical insurance lapse, Murphy says, "he at least should have been up front, tell people you have to stop benefits so they can take alternative means to pay for it."
Gurba says he feels his former employees' pain.
"I am very sorry for the situation," he says. "I spent basically the bulk of my net worth keeping that company alive. The reason wasn't that I was smart. It was because I have a heart for the company."
Born in Philadelphia and educated in New Jersey, Gurba, 52, maintains a home in Manheim as well as in Florida.
He began working with Hamilton Technologies in 1978. Bulova acquired Hamilton in 1989. Gurba purchased the company in 1995.
He says he has hated watching Webster take over his company and believes the bank should be held accountable under "lender liability" in this case.
"I didn't want to sell the business," he claims. "I wanted to borrow more money and keep it going. So the bank foreclosed and sold the assets."
According to Gurba, he had run out of his own assets and he couldn't go elsewhere for money because "no one is lending."
"The unfortunate part for Bulova is that we weren't part of anybody's bailout plan," he says.
Nora Hess, one of the union employees who lost jobs here, says she doesn't think Gurba will "make this right."
So she's moving on with her life.
She has begun taking courses that will lead to a degree in respiratory therapy from the Lancaster Campus of Harrisburg Area Community College.
"I don't have much of a choice," she says. "I was with Bulova for 27 years. I'm limited in what I can do."
Meanwhile, she and her Bulova co-workers remain nettled by what happened and how shabbily they were treated.
"Gurba knew what the bank was controlling," she says. "He could have given us a warning."
To see more of the Lancaster New Era, or to subscribe to the newspaper, go to http://www.lancasteronline.com/newera. Copyright (c) 2009, Lancaster New Era, Pa. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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