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.