By Brett Wallace
bwallace@chronicle-tribune.com
Published: Thursday, May 7, 2009 1:09 AM EDT
Moorehead Electric Co. is in the process of shutting down its operations after a long and proud 70-year history.

Employees and politicians say they’re saddened because the situation has come about through no fault of the company itself.

When Getrag suspended operations on the construction of its planned Tipton County facility in October, it left its 44 subcontractors on the hook for $45 million in unpaid invoices.

Getrag claims Chrysler, who had helped the German transmission maker settle on the Tipton location, owes that money to the unpaid companies. But Chrysler disagrees, and the two companies are now headed to court to settle the dispute.

Meanwhile, the 44 subcontractors have filed a joint suit in federal bankruptcy court but otherwise find themselves without rapid recourse.

For Jerry Albrecht, president of Moorehead Electric, it meant a gaping hole of $9.6 million in his company’s finances. Albrecht’s employees said he fought as hard as anybody ever could to find a way to keep the company operating. Ultimately, the task proved to be too much.

“We do feel there is a possibility of recovering the money, but it has to go through the bankruptcy court in Detroit,” Albrecht said.

…“Dan Burton and Joe Pearson seemed to be the only ones who actually tried to help out,” Albrecht said.

Burton’s office took the lead on a letter sent to the leaders of Chrysler and Getrag in March. The letter, which was signed by five Hoosier congressmen, urged those company officials to assist the local contractors affected by the deal.

Burton, Grant County’s representative in the U.S. House, said he felt terrible after hearing that Moorehead is now scheduled to shut down.

“If (the federal government) is going to try to bail out Chrysler, they should try to pay what’s owed to the subcontractors as well,” he said.

Burton said he’s sympathetic to the plight of the subcontractors, many of whom are located within his congressional district, but added he doesn’t believe there’s any plan at the federal level to assist these companies. There’s been some talk in Washington of a federal bailout of the automakers’ suppliers, but not of subcontractors that worked for them, Burton said.

At this time, he sees bankruptcy court as the answer for the companies.

“But that’s the thing that worries me, that the bankruptcy proceedings are not proceeding as fast as they should,” Burton said.

In Indianapolis, Pearson, who represents part of Grant County in the state House of Representatives, called it a shame and a tragedy that the situation has taken down Moorehead. He called Albrecht a person of high character and a pillar of the Grant County community.

“I’m so very disappointed we were not able to do things to help Jerry get through his problems,” Pearson said.

Pearson introduced language in the recently defeated state budget that would have guaranteed low-interest state loans to the contractors affected by the Getrag shutdown. Though funding was not attached to the proposal, Pearson said it would’ve at least created a mechanism by which the Indiana Economic Development Corp. could potentially offer loans to the affected companies.

Pearson also invited Albrecht to Indianapolis last week to speak to legislators. The pair had a meeting with several state and federal agencies to try to find a way to offer a short-term loan to Moorehead. None was found, he said.

“If there’s any way, it has to be done,” Pearson said. “It’s not a time for blame.”

Pearson said he favors using the state’s rainy day funds to help the companies affected by Getrag, but that idea has not enjoyed widespread support in Indianapolis.

At the time Getrag shut down the Tipton County project, Albrecht said about 200 people were working for Moorehead, including union electricians hired by the company on a per-project basis.

The contract he signed was the largest in the company’s history. Its nonpayment ended up being big enough to bring the company down.

More than 100 jobs have been eliminated in the past few weeks, and Albrecht said the final group of employees will wind down operations over the next few weeks.

“Some of the irony is this is that as we’re closing the doors, we’re still getting complimentary letters from customers like Howard Community Hospital and Muncie schools on the quality of work we’ve done and our excellent people,” Albrecht said. “That’s what makes this so tough.”

Albrecht believes that even in the recession, many of his workers will have no problem quickly finding another job.

“A lot of these people were with us for long periods of time, especially in Marion and Kokomo,” he said. “They’re great people.”

Burton said he hopes the former Moorehead Electric workers will utilize all of the community’s resources, including his office, if they need assistance.

Tim Eckerle of the Grant County Economic Growth Council said he expects Moorehead’s loss will be felt in the community.

“There are a number of electrical contractors, but they were the largest,” he said.

Moorehead was one of two Grant County companies, along with Gas City-based Industrial Maintenance Specialists, that have not received payment for services performed at Getrag.

According to Blair West, spokeswoman for the Indiana Economic Development Corp., Chrysler has a hearing with the Indiana Securities Commission on June 24, when the company could face fines or restitution to Tipton County for alleged failure to inform the county of issues related to the joint venture agreement it had with Getrag.

West said state Secretary of Commerce Mitch Roob has appealed to Washington officials that Chrysler should satisfy obligations with local contractors before receiving any additional federal bailout money.

“Unfortunately, it does not appear that the Treasury secretary’s proposal achieves that desired outcome,” West said.

She believes money will be available eventually when Tipton County and the IEDC are able to sell the unfinished Getrag site to another potential investor. At that time, money from the sale would first be used to satisfy outstanding obligations to contractors before going to the company, West said.

In the meantime, it appeared unlikely that Moorehead Electric will be around to see that happen.