Analysis

Remington workers terminated without severance, billionaire owners not held accountable

This fall, workers at the Remington Outdoor Company plant in Ilion, N.Y., were given notice that they would be terminated; they would not be paid severance that Remington is contractually obligated to pay. This announcement that affects 585 workers at the Ilion plant is part of the larger Chapter 11 bankruptcy of the company, impacting workers around the United States. The United Mine Workers of America has filed a claim in the bankruptcy proceedings on behalf of the terminated workers. 

Severance pay benefits at this plant were gained through a collective bargaining agreement between the Remington Outdoor company and the employees represented by the UMWA, Local 717. The total value of the severance that is owed to the terminated workers is $514,093. The assets of Remington, including the Ilion plant, were sold at auction for approximately $160 million as part of the bankruptcy process. This revenue will be used to pay the debts of Remington, but the debts that are prioritized are those owed to other capitalists.

In the bankruptcy process, there is a predetermined order in which the revenue from selling assets is used to pay off debts. The banks are the first group to be paid and after that other debts such as those owed other companies, as well as those owed to workers, are paid in an order set by the bankruptcy court. 

Part of the bankruptcy process allows a business to reject collective bargaining agreements as long as the business can demonstrate that it has attempted to renegotiate a contract with the union. This clause in bankruptcy law could result in the court allowing Remington to reject the collective bargaining agreement that grants the workers at the Ilion plant severance benefits. 

Given the number of assets that have been sold during the Chapter 11 bankruptcy, it could be headed towards being converted to a Chapter 7 bankruptcy where all assets will be sold off and used to service other debts and the workers may or may not receive their severance, depending on the order that the bankruptcy court determines.

Remington is owned by Cerberus Capital Management, which is a private equity firm that acquired Remington in 2007. The profits generated by the company since 2007 have gone to Cerberus Capital Management, however, they are not legally responsible for upholding the agreements made with workers that created the profits. CCM is more than able to uphold the collective bargaining agreements made with workers as it controls assets that generate over $70 billion in revenue every year. 

This state of affairs affects workers in across many industries that CCM owns from oil and gas production, healthcare, defense, and retail to manufacturing. Worldwide there are approximately 400,000 workers  employed by companies managed by CCM. These workers, like those at the Remington factory in Ilion, are at risk of being terminated and deprived of the benefits they are owed, unable to recover what is owed them from CCM. 

All progressives and revolutionaries should support the members of UMWA, Local 717 at the Ilion plant, as an injury to one worker is an injury to all workers. All workers not only deserve severance, they deserve jobs! Those capitalists responsible for the theft of the livelihoods of hundreds of upstate New York workers are the real criminals who should be behind bars. Solidarity with the Remington workers!

Photo: Remington workers of UMWA Local 717. Credit: UMWA.org

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