BY COUNCILOR STENBERG:RESOLUTION SUPPORTING APPLICATION OF IRON CLYDE MANUFACTURING, LLC FOR A STATE CHALLENGE GRANT.
WHEREAS, pursuant to the Rural Development Act, local units of government are required to issue a sponsoring resolution on behalf of the business requesting financing through the Northland Foundation; and
WHEREAS, the city of Duluth has received a request to issue a resolution on behalf of Iron Clyde Manufacturing, LLC; and
WHEREAS, it is consistent with the purpose of this governing unit to encourage employment and increase tax base.
NOW, THEREFORE, BE IT RESOLVED, that the city of Duluth supports this application
for funding on behalf of Iron Clyde Manufacturing, LLC.
Iron Clyde Manufacturing, LLC is a new custom machining and fabrication entity that has a long history in Duluth--namely, Clyde Iron and DEMCO. An overview of that history includes:
In 1987, Clyde Iron (then a division of AMCA International) merged with American Hoist and Derrick; this new company was named Amclyde. It became an engineering company and subcontracted all of its production. Thus, it sold off its manufacturing facilities in Duluth. Jerry Siegel, through the Milton Siegel Company, purchased the plant and equipment from AMCA International later that same year. Subsequently, Duluth Engineering and Manufacturing (DEMCO) formed as a company and many former Clyde employees were hired. DEMCO operated in the original Clyde Iron plant under a lease agreement with the Milton Siegel Company. For a variety of business reasons, in July 2000 DEMCO closed. Mr. Siegel negotiated to purchase the DEMCO equipment and also acquired the company records (i.e., work orders).
Thus, this new company (note new name, "Iron Clyde") operates in the same facility and with the same equipment and has hired many of the former DEMCO and Barko Hydraulics employees, all of whom were former Clyde Iron employees and many of whom have up to 30 years' experience with this particular work and product. The company is providing machining and fabrication for an expanding customer base.
Thus, Iron Clyde Manufacturing, LLC has assembled a $200,000 working capital financing package that consists of a $100,000 SBA-guaranteed bank loan and this $100,000 Northland Foundation loan. Collateral for these two loans is the first secured position on the equipment.
This project allows for the retention of 21 machinists, lathe operators and welders with base wages of approximately $15.00 per hour.