A small businessman has mounted a full-fledged campaign opposing the General Services Administration's sale of government-owned forging plants to large companies for what he calls non-competitive "giveaway" prices.
Gordon Shultz, president of Shultz Steel Co., a South Gate, Calif., firm that does about $40 million in annual sales, first learned of the pending sale of valuable government property in a trade newspaper. According to that report, the GSA was ready to sell two government facilities to Aluminum Co. of America (Alcoa), the world's largest aluminum producer, and to Worcester, Mass.-based Wyman-Gordon Co., one of the nation's largest forgings producers.
Shultz was especially startled to learn that Alcoa paid only $13.3 million to the government for the Cleveland-based forging facility -- one of the country's largest -- which the aluminum producer has operated under a lease arrangement since 1955. Shultz's own firm had recently invested $12 million in equipment that would allow his company to compete directly in the forging market with Alcoa and Wyman-Gordon.
"If I had known the government was selling off one of the largest [forging] plants in the country for only $13 million, I certainly would have bid on it," Shultz says. In fact, he tried to make an offer, only to learn that the property was not subject to competitive bidding. "It's an outrage, a giveaway, pure and simple," he says. He also strongly opposes the pending sale of an Air Forceowned plant in Grafton, Mass., to Wyman-Gordon for only $34 million.
The firm is trying to block the sales by appealing to three California congressmen and a House Government Operations subcommittee that is reviewing the deals.
"Our problem basically is that we have just gone and borrowed money at high interest rates and invested in a large new press. That one press is going to cost us as much as what Alcoa is paying for one of the largest facilities in the nation," says Edward Becht, vice-president of marketing at the company. The purchases by Alcoa and Wyman-Gordon, he adds, will give these companies "a permanent unfair advantage."