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Ohio firm set to purchase Indiana's Gorell assets

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By Richard Robbins
Friday, Feb. 17, 2012
 

INDIANA -- An announcement Wednesday that custom window manufacturer Soft-Lite LLC of Streetsboro, Ohio, will purchase the inventory and other assets of Gorell Windows & Doors of Indiana, Pa., begs the question: Will the new owners maintain operations in Indiana or set up shop elsewhere?

The agreement with Soft-Lite came after Gorell was placed in receivership last Thursday with mounting losses. Meridian Group of Pittsburgh was appointed receiver by Allegheny County Common Pleas Judge Christine Ward after PNC Bank pressed for repayment of $10.5 million owed by Gorell, according to court records.

Margaret Good of the Meridian Group, who negotiated the deal with Soft-Lite, said while the sale offers "some ray of hope" to workers, a final decision by Soft-Lite on future employment was still pending.

Terry Witherow, president of the IUE-CWA local union that represents about 114 workers at Gorell, said he was "cautiously optimistic" about the future.

"I'm hoping they stay, but there was no indication one way or another," Witherow said, adding he was both "shocked" and "happy" about Wednesday's sudden turn of events.

One possible straw in the wind is that Soft-Lite purchased the Gorell name. The firm, which has been in business in Indiana since the mid-1990s and at its height employed some 400 workers, "has an excellent reputation" for its vinyl replacement windows and other products, Good said.

A potentially troubling sign is that Soft-Lite is not buying the Gorell manufacturing plant in White Township. According to sources familiar with the plant, the facility covers some 230,000 square feet and is in good condition.

Good said Soft-Lite, which is located in the suburbs of Cleveland, could still lease the building. The mortgage holder is the state Department of Community and Economic Development, she said.

Good and Soft-Lite President Roy Anderson met with Gorell employees Wednesday morning. Good said Anderson's remarks and news of the pending sale were met with applause by the workers.

Witherow said he would be willing to reopen the union's current contract if that meant there was a chance the Indiana facility would remain open.

"We all need the jobs here," he said.

Murky future

On Monday, the Meridian Group fired between 60 and 70 previously furloughed workers. About 200 workers remained on the Gorell payroll, Good said. She added that she expects the plant to remain up and running for at least the next 60 days under the present receivership arrangement.

Witherow put the union workforce at 144 with an additional number of white collar jobs, for a grand total of about 285.

Good refused to divulge a sale price, saying certain legalities relating to the purchase agreement still had to be cleared up. One thing Soft-Lite was not buying was the company's debt, Good said, which has been growing at a rate of $500,000 a month over the past several months.

Good said the decision not to buy the debt "was bad news for vendors." At the same time, she said Soft-Lite has a strong relationship with many of the same vendors used by Gorell.

In an announcement Wednesday, Soft-Lite's Anderson said, "We are very excited about this acquisition and what it means for the company. It will allow Soft-Lite to expand its operations to better service our existing customers, to further grow our network of dealers and distributors and to offer a broader range of products and sales tools to our customers."

The company press release said the firm was looking forward "to forming a lasting business relationship" with Gorell's dealers and distributors.

Good said, though Gorell and Soft-Lite were "direct competitors," their sales were concentrated in different parts of the country.

Gorell was more "southern"-oriented, Good said, while Soft-Lite locked in on the "northern" United States.

Gorell's debt woes have been blamed on the collapse of the housing market in 2008-2009 and on the subsequent contraction in bank loaning practices.

Byron Stauffer, director of the Indiana County office of planning and development, said "industry-wide a number of window manufacturers have gone out of business."

He said, even as the firm sank deeper into debt, Gorell maintained "a strong (customer) distribution list," a good working relationship with its union workforce and "reasonable" manufacturing costs. In other words, according to Stauffer, what went wrong for Gorell had everything to do with the industry as a whole.

Stauffer said if Soft-Lite were to abandon Indiana, the loss would shoot a $15 million hole in the local economy. That was his estimate of the payroll that would be lost along with the impact on local businesses, including local suppliers and service groups such as restaurants.

Stauffer said, in the event Soft-Lite leaves town, he was almost certain another manufacturing concern would eventually settle at the Gorell plant.

Gorell's potential loss "creates challenges," Stauffer said, but he found some solace in the fact that Gorell was a replacement, taking over from Seasonal Industries, Inc., an earlier window manufacturer founded by the Gorell family.

According to Good, the discussions with Soft-Lite about Gorell were under way by last Friday, a day after Gorell was placed on the market. By Sunday night, she said, lawyers were working on contract language.

As news of the acquisition spread, Gorell's vendors were expressing "absolute delight" at the prospect of Soft-Lite riding to the rescue, Good said.

As for Soft-Lite itself, she said the company was "very strong financially." That was one reason, she said, that the deal moved as quickly as it did.

Gorell Windows & Doors was founded in the early 1990s by Wayne Gorell, who is retired in Charlotte, N.C. Gorell's father founded Seasonal Industries Inc. in 1947.

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