Crenlo and its workers union, UAW Local No. 2125, issued a joint statement Thursday that the company has reached an agreement with local and state officials for financial support. The extra money allows Crenlo to remain in Rochester and keep its workforce of 400 employees here.
"We are pleased to announce Crenlo and UAW Local No. 2125 agreed in March to continue cab manufacturing operations in Rochester, MN. This will help ensure Crenlo’s global competitiveness," wrote Crenlo CEO Matthew Karmel in the announcement sent to employees on Thursday.
"The Minnesota Investment Fund, in cooperation with the Minnesota Employment and Economic Development Authority, Rochester Area Economic Development (RAEDI), and Rochester Public Utilities (RPU), also supported the agreement. "
Karmel did not specify how much money the city, through RAEDI, or the state is investing in the company.
The Rochester City Council had an item about the agreement on the agenda of its last meeting, but it was continued to the April 19 meeting due to a concern by the company. Assistant City Administrator Terry Spaeth stated today that the agreement is still being finalized by the state. He hopes to be able to publicly discuss the details of the agreement next week.
The 69-year-old Crenlo has facilities at 1600 Fourth Ave. NW and 2501 Valleyhigh Drive NW. Emcor Enclosures, a Crenlo division that makes metal boxes for the electronics, security, medical device and solar energy markets, operates in a third facility on the Rochester Technology Campus, formerly the IBM campus.
Interim RAEDI President John Wade confirmed the agreement. He referred to the city and the state as the official sources for details of the agreement. However, he said this is a very good deal for Rochester and the community.
"It is tied to the jobs. The support is conditioned with ongoing commitment to employment," Wade said.
He said that for a "fairly modest" investment, the company was convinced to not move operations to other facilities and to commit to maintain its workforce of 400 with an estimated $20 million payroll.
The announcement comes on the heels of the company telling employees that the 69-year-old Crenlo plant at 1600 Fourth Ave. NW will be closed by the end of the year. To counter that, the Valleyhigh plant will be expanded and operations will continue at Crenlo's site on the Rochester Technology Campus.
When asked, Local 2125 President and Crenlo machine operator Troy Arnold said the changes are good for the employees and won't result in job cuts.
"In fact, we expect growth with this move. There is a major construction project coming in May at the Plant #2 site," he wrote.
In October, the company told employees that it might be closing completely in Rochester and it asked to modify the union's five-year labor contract, which was signed less than a year before.
That led to uncertainty and strained relations between the company and its employees. The majority ownership stake of Crenlo was purchased by California-based Angeles Equity in December 2019, so the entire management team that signed the labor contract had all left the company by the time these issues arose amid the coronavirus pandemic.
In the wake of the statement, Arnold confirmed that the labor contract will remain unchanged.
In the statement with Karmel, he was positive about how the potentially devastating situation had been worked out.
"... I am more than pleased we collectively built a formula to secure the future of Crenlo’s Rochester operations. Crenlo has demonstrated a lot of goodwill, cooperation, and courtesy towards our membership," he wrote. "The membership of UAW Local No. 2125 is committed to doing our part to ensure Crenlo’s Rochester manufacturing operations lead the industry globally in quality, delivery, and efficiency."