HPM kept deducting money from employee paychecks though their insurance had been cancelled two months before. Retirees, like IAM member Otis Edwards, left, saw their medical co-pays rise from $25 to $286 a-month before their coverage, too, was cancelled.

HPM Corporation Greed Costs Mt. Gilead 600 Jobs

Mount Gilead may not look like a crime scene, but after what happened last year, this tiny Ohio town should be cordoned off with yellow police tape.

The citizens here were mugged, robbed and left to bleed by the 125 year-old HPM Corporation, the largest employer in all Morrow County.

Like so many U.S. manufacturers, HPM went bankrupt last year. The company laid off some 600 people, erasing many of the region’s best-paying jobs.

HPM didn’t fail because of cheap foreign imports or a drastic drop in orders. HPM didn’t flee Ohio for the low wages of Mexico or China.

In fact, when HPM closed its doors July 1, 2001 employees were still booking orders for their respected line of plastic extrusion, injection molding and die cast machinery.

Employee insurance checks started bouncing in April and May. Local IAM leaders discovered that HPM’s owners had stopped paying premiums to the carrier in March, and the carrier had canceled the company’s policy. Yet HPM continued deducting the co-pays from employee paychecks for two months after the cancellation. 

“They sent my dentist a check that bounced. I had to go the bank, pick up the check, and pay $10 to the bank for the bad check, plus pay the dentist. Here I am on layoff, and I had to make good on that! When I called the company to complain, they just said, ‘Oh, well’,” recalls Terry Barnett who was laid off by HPM after 24 years.

HPM had done more than write thousands of dollars of bad insurance checks. The L.A.-based owners who purchased HPM in 1995 had also defaulted on $35 million in loans from the Fleet Capital Corporation. On July 1, Fleet seized HPM’s assets, threw the company into bankruptcy, and closed down the plant.

“No one knows what happened to all that money. The bankruptcy court is still trying to figure that out. They didn’t invest it in new machinery, and they didn’t pay back their debts,” said Earl Gilkison, business representative for IAM District 54.

The company still owes the employees approximately $1 million in vacation time, unpaid medical bills and deductions taken for non-existent insurance coverage, he continues.

“How can a business do so well for 125 years, then new owners come along and five years later, you lose everything?” wonders Bob Miller, who lost his job after 33 years at HPM.

“I’m 51 years old with school training as a Machinist and more than 30 years experience. I’m out there looking for a job, but the only places that are hiring pay maybe $6 or $7 an-hour, with no benefits. What am I going to do? I can’t even afford to drive to some of those jobs for wages like that. But my unemployment insurance runs out in two weeks, so maybe I’ll have to take one of those jobs,” Miller adds.