The Michigan Daily-Wednesday, July 28, 1982-Page 3
EXPERIMENT SAVES FAILING FACTORY
Worker-owned plant succeeds
By The Associated Press
CLARK, N.J. (Al') - A year ago,
General Motors Corp. was on the verge
of shutting down its big bearings fac-
tory here because it was "non-
competitive."
Today, the plant is a worker-owned
experiment that is exceeding produc-
tion expectations, its managers say.'
And everybody from executives to
assembly line workers says he works
harder and takes more pride in the
company.
Frank Byrne, a 29-year-old tool-and-
die maker, says the first time he heard
that some of his co-workers had come
up with a plan to buy the ailing bearing
plant "the idea seemed far off."
BUT AFTER everyone got involved,
it seemed more and more like a good
idea," he says. "It was certainly better
than the unemployment line."
There were about 2,000 jobs at Clark
when GM owned it. That shrank to
about 900 when the plant became Hyatt-
Clark Industries last Nov. 1, but has
State cash
shortfall
may reach
$100
million
LANSING (UPI) - State officials
said yesterday this year's budget shor-
tfall could reach $100 million, but
cautioned any decisions on what to do
about it must wait until next month.
Robert Kleine, the Budget Depar-
tment's chief revenue analyst, said the
deficit could reach $100 million depen-
ding on developments in the Depar-
tment of Social Services and state tax
collections.
DETROIT radio station WJR repor-
ted the deficit may be between $60
million and $100 million.
WJR also said Deputy Budget Direc-
tor Douglas Roberts noted the shortfall
probably would require delayed
payments to local governments and
school districts.
Roberts said there is too little time in
the current fiscal year ending October 1
to achieve the necessary savings from
cutting state department budgets.
ROBERT BERG, Gov. William
Milliken's chief spokesman, called it
"premature" to put a final figure on the
budget deficit. He said officials are
awaiting July's tax figures showing the
first full collection of the new one per-
centage point temporary income tax
increase.
Those figures are expected to be
available in mid-August.
State spokesman said delaying the
payments until the next fiscal year
would require Milliken to issue his four-
th budget-cutting executive order this
fiscal year.
Already, the House and Senate ap-
propriations committees have ap-
proved three Milliken orders cutting
$628 million from state spending.
For weeks, top budget officials -
citing Michigan's poor economy - have
hinted another executive order might
have to be issued.
'We had reasonable expectations and exceeded
them. Now we'd like to exceed unreasonable ex-
pectations.'
-Pat Mazzeo,
plant personnel director
since grown to about 1,100.
GM said it wanted to close the
million-square-foot plant because the
aerage $19.65-per-hour wage and
benefit costs were well above the in-
dustry average. And, GM said, the
plant manufactured bearings for rear-
wheel-drive cars in an era when the
more economical front-wheel-drive
autos were taking hold.
BUT THE PLANT is operating
profitably now, its managers say, poin-
ting tocuts in pay and benefits accepted
by employees, reductions in other costs
and improvements in productivity.
"It's going well," says Pat Mazzeo,
the nlant's 33-vear-old n ersnnel diraee-
tor. "We had reasonable expectations
and exceeded them. Now we'd like to
exceed unreasonable expectations."
Mazzeo was one of several GM
executives who joined local union
leaders to organize the workers' $53
million purchase of the facility last Oc-
tober.
"WE ALL FEEL more comfor-
table," says Vince Mariucci, 53, who
has been a tool-and-die worker at the
factory for 13 years. "We're getting
something for producing more. We're
getting production incentives now and
if this thing comes about, we'll all get
stock in the plant."
What the workers have done since the
new company took over the 44-year-old
plant speaks for itself, firm officials
say. The factory produced an average
of 80,000 bearings a day in November.
Today, it ships close to 180,000 a day.
And, they add, while 12 percent of the
pieces rolling off the production line in
November had to be scrapped, that
figure now approaches 6 percent.
Some management workers assumed
more responsibility - and in some
cases higher salaries - when Hyatt-
Clark took over. Mezzo, for example,
went from being a general supervisor
in the personnel department of a GM
factory to the personnel director of a
corporation. He will not discuss his
salary.
"I WOULD HAVE been working up
on Route 22 at a GM training center had
the Clark plant closed," he says. "That
would have been in some ways a dead-
end job. This gives me more respon-
sibility."
See WORKER-OWNED, Page5
Two-wheeled plunge AP Photo:
Jim Buckland, of Jackson, Mich., decides to finish upa muggy bike ride yesterday with a refreshing dip.
Flat-rate tax favors rich analyst says
By The Associated Press
WASHINGTON - A congressional tax
analyst said yesterday that replacing
the graduated income tax with a flat-
rate system and no deductions would
produce a major windfall for the rich at
the expense of middle-income families.
By 1984, said Joseph Minarik of the
non-partisan Congressional Budget Of-
fice, a typical flat-tax plan at an 18.7
percent~rate would raise taxes for a
$25,000-a-year family by $243 and give
the $250,000-a-year family a tax cut of
$27,000. The family making $10,000 a
year would pay $13 more; the $100,000
family would pay $6,834 less.
At a hearing before the Joint
Economic subcommittee on monetary
and fiscal'policy, two economists who
are leading the fight for a flat tax hailed
their plan as superior to tne current
mishmash of special deductions,,exem-
ptions and credits with a dozen dif-
ferent rates.
But two Treasury tax experts,
Assistant Secretary John Chapoton and
his deputy, David Glickman, have em-
hihasized that a flat tax would, in
Chapoton's words, "conflict with the
long-standing principle that the amount
of a person's federal income tax should
be based on the person's ability to pay."
Yesterday's hearing was the first
held since the flat-tax idea began
spreading. The Joint Economic Com-
mittee has no authority to write
legislation; the panel with that
authority, the Finance Committee,
plans hearings late this year.
DISCUSSION of a flat tax has been
growing in recent months and
President Reagan has-expressed an in-
terest, while conceding "it's not as
simple as it sounds." The Treasury
Department is studying the concept,
which Secretary Donald Regan has
called "maybe the fairest tax of all."
Norman Ture, an author of Reagan's
economic policy who resigned recently
as undersecretary of the treasury, told
the subcommittee that potential
benefits of a flat tax should not be over-
sold.
He said the first goal of any such
change should be neutrality-equal tax
treatment of money saved and money
spent. Fairness and simplicity are less
important, he said.
"If for no other reason than we don't
know what tax fairness really is; it
should take a back seat to other
criteria, principally neutraligy, in the
design of a flat-rate, broad-based tax,"
Ture added.