Business

Tuesday, Oct 11 2011 08:48 PM

Local manufacturer closes; dozens jobless, owed back pay

BY COURTENAY EDELHART Californian staff writer cedelhart@bakersfield.com

Metal fabricator Lortz Manufacturing Co. closed this week after 64 years in business,, putting 46 people out of work.

Most of the employees who were let go when the company shut down Monday were still owed back pay.

As of 11 a.m. Tuesday, the California Department of Industrial Relations had received 32 unpaid wage claims, and more claims were pending, said agency spokeswoman Erika Monterroza.

In a statement issued Tuesday, president and chief operating officer Nathan Lortz said, "there is no way to explain how badly we feel about the negative impact we have thrust on extremely loyal and talented employees and vendors.

"The fact is quite simple. We ran out of funds, culminating with a freeze on our bank accounts on Friday."

The company's woes started when $2.5 million in fabrication orders were canceled with no notice, Lortz said. The then $24 million a year company didn't have a line of credit, he said.

From a peak of 223 employees, Lortz reduced its payroll to 146 in 2008; 95 in 2009, and 84 last year before shrinking to 46 as of its closing, according to the statement.

It also cut pay across the board for remaining employees.

It wasn't enough.

In addition to failing to make payroll, the company has a delinquent tax bill, according to the Kern County Assessor's Office.

It owes $48,598.89 in back taxes and $4,859.88 in penalties on supplies, office furniture, machinery and equipment.

Charles Lortz Sr. founded the company in 1947, initially calling it Lortz & Son Manufacturing. Located in northwest Bakersfield at 4042 Patton Way, the company did metal fabrication work for the energy, aerospace, agriculture and food processing industries, among others.

Even though Lortz operations have ceased, the Department of Industrial Relations can still pursue back wages owed to former employees, the state's Monterroza said.

About two-thirds of the time, wage claims are resolved through direct negotiations with employers, she said. If no agreement is reached, an administrative hearing is scheduled, and a ruling in favor of employees could lead to a lien on property or withholding tax refunds if it is not taken care of.

That said, employees may not get the full amount they are owed, Monterroza said. "It really just depends on the position of the company. Sometimes we can get it all, sometimes it's just pennies on the dollar," she said.

The department also is looking into whether Lortz should be fined for failing to file notice with the state that it planned massive layoffs, which is required under the Worker Adjustment and Retraining Notification, or WARN Act.

In general, companies are supposed to give 60 days' advance notice of a complete shutdown, but the requirement varies depending on the size of the company and how many jobs are lost.

The president said in the statement, "There is no way to sugarcoat how the 64 years ended and we are deeply sorry."

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