PRESTO Womens' Pensions go Poof in Alamogordo

September 6 2003 - Commentary by David Boje (co-organizer PeaceAware.com); update July 2004

PRESTO "Alamogordo Manufacturing Plant" is a cookware company making aluminum pots and pans that for 20 years had a factory in New Mexico. Look around your kitchen and you will find at least one of the PRESTO ® salad shooters, deep fryers, popcorn makers, or, pressure cookers. A former line supervisor at Presto told the women workers, "We are relocating to China in order to keep prices down."

NOTE: I originally compild this account in Aug/Sep of 2003 and did not hear much until June 29 2003, by a former worker (shose identity shall stay annonymous). What follows is her critique of the 2003 article follwed by the original article.

AN EMPLOYEE disagrees June 29, 2003:

I worked for Presto for nearly 22 years, and I do know how the employees
were treated and for the most part that was very good. As far as the retirement you talk about the retirement that we did have was a 401 K program and each employee recieved exactly what they had put into it + matches from Presto up to 4% and any + or - dictated by the stock market. The 40 thousand that you quote is intirely of base. You should retract that statement.

As to your claim to over time most employees were happy to work over time at time and half pay. In the near 22 years working at Presto I worked one Sunday and I did that only because I wanted to see what my check would look. Believe me it was not worth it by the time the taxes were deducted. Working Sundays was a very rare thing for all employees. Employees were not forced to work overtime. They were asked to if it was a scheduled work day, but this was seldom.

I was dissapointed when Presto decided to go to China, but any one that wanted to take advantage of going to school could. If you check you will see that many of the former Presto emplyees are attending College at NMSU-A under the TAA program getting an associate degree in different fields. I just had to respond to the misinformation that you have put out. Hopefully, you will get the facts straight and put out a retraction on your Web. If I can be of help to set the record straight I can be contacted at my e-mail address.

BELOW are the 2003 claims (If anyone has additional information, contact dboje@nmsu.edu Thank you. July 13 2004

Women whose jobs went "Poof" from PRESTO in Alamogordo have requested PeaceAware (and students & faculty) to do a case study of the PRESTO plant. Specifically they want you compare the working conditions at PRESTO Alamogordo, and at the Chinese factory that took their jobs. Also, their pension disappeared, after they worked 15 to 20 years at PRESTO Alamogordo, yet the corporation is financially healthy (see report that follows). The PREESTO case speaks to the issue of how organizations organize by gutting the company of its American workforce, then set up a Virtual Shell with well financed benefits for the executives, owners, and those in the center of the firm, while on the periphery the people working in sweatshops go hungry and work in unsafe conditions at slave wages (40 pennies an hour in China PRESTO factory). They say, every American corporation is doing it, setting up a virtual periphery and a gutted shell of sweatshops and pensions that go poof on the periphery of the subcontracting network. Someday, there will be no good jobs left for the U.S. middle class. Then what?

PRESTO: A Case Study in Predatory Capitalism. PRESTO's parent company is "National Presto Industries Inc". In 2002, National Presto Industries, Inc (hereafter PRESTO). closed its factory, fired all its workers (except some tenders), and moved manufacturing to China.

"National Presto Industries, a manufacturer of pressure cookers, griddles and other kitchen appliances, ... decided last year to shut down plants in Mississippi and New Mexico and expand production in China. ' We've had these plants [in the US] for a very long time. ... It really hurts to say goodbye to them ' [said the president of Presto]."

PRESTO is listed at NYSE as NPK, and as we will show, it is doing well enough to pay the women their pensions. The mostly female workforce, many of whom had worked 17 to 19 years, and had immigrated from SE Asia and Mexico, were without a job. The women are now in their 50s, and since they had been forced to work overtime and 6 and 7 days a week, year after year, most of these women had not learned English. So they can not find new work in Alamogordo.

Photos - Left is Women in US PRESTO factor; Right women of PRESTO China

Many of the PRESTO employees thought they had 401 (k) pensions of around $40 thousand dollars, but reports from the women of PRESTO, we are receiving at PeaceAware, are that when the executives closed the factory, they also gutted the 401 k, letting it crash and burn, so the women neted a few thousand dollars. These women want relief; they want their pension money back from PRESTO corporation. What can you do? Get the facts about globalization, and what it does to your local community.

It always starts with a reasonable rationale. The women of PRESTO were told that the reason the factory moved to China was that management wanted a lower price on the cookware. I did some research and found out that PRESTO's strategy relies too heavily on Wal-Mart (NYSE: WMT) and Target (NYSE: TGT) to distribute its products.

A woman who worked at PRESTO for over 17 years tells a story: "a pan made in Alamogordo's plant that sold at Walmart for $19 is now selling for more than $30." Clearly, then, though the Chinese workers are being paid a pittance, prices are far from "down" for the New Mexico consumer. So it appears that with all the outsourcing to China instead of New Mexico the net cost to consumers has increased. And PRESTO according to BBC news (1, 11 Nov 2002), is "reluctant to say how many jobs will go at National Presto's plants in New Mexico and Mississippi but it will be a "substantial number for a company our size" - at least half the workforce."

We at PeaceAware are concerned about the misery index caused by NAFTA (#4,585). and corporate predators who turn out women in New Mexico to hire cheaper women in China. We want to make New Mexicans GlobalAware. We want to collect the stories of the PRESTO Women, and spread the word in editorials. We think that so-called "globalization" is another word for "stealing," the fat cat executives robbing little old women of their pensions, and America becoming Wal-Mart nation.

Also, rumors among the former Alamogordo PRESTO women employees are that the accident rate is high among the new Chinese employees. As it was, OSHA standards appear to have been a joke during the Alamogordo days. I did some research and found that the rumors of high accident rates may be true. This is a picture of a Chinese woman in a BBC article about PRESTO.

According to a BBC report, PRESTO working conditions for women are unsafe (Hennock, 11 Nov 2002 BBC)

The long hours and hazardous working conditions of women working for PRESTO subcontractors in China is part of the Wal-Mart China story. The women making PRESTO products in China face even more unsafe working conditions than the immigrant women of Alamogordo. Clearly something is wront with predatory globalization practices which moves jobs from country to country, and each time conditions of work worsen.

How much are women in China paid to make PRESTO? China's pool of cheap labor is paid wages that are a fraction of those in the US, and six times cheaper than Mexico - averaging about 40 pennies per hour for a factory worker.

The Wal-Mart Syndrome - Everytime another Superstore opens in New Mexico, a raft of local small businesses, from grocery stores to hardware stores close down. The ripple effect is fewer good paying jobs in the US, so people must work two $6 an hour jobs, on two shifts, to make ends meet in New Mexico.Wal-Mart bought about $14 billion-worth of China made products last year. Wal-Mart is the major outlet for PRESTO products. Wal-Mart has a super store in Alamogordo and in Las Cruces, and is openning a second one in Las Cruces. Sweatshop goods from China is the major source of Wal-Mart merchandise. US manufacturing and jobs shrink as Wal-Mart opens each new store. The PRESTO story is just the tip of this iceberg.

Some PRESTO history - The company, founded in 1905, was originally called, Northwestern Iron and Steel Works (Eau Claire, Wisconsin, see Corporate History). In 1915 the PRESTO installed an aluminum foundry for the specific purpose of manufacturing large-size pressure canners for home use. PRESTO became one of the largest manufacturers of cast aluminum cooking utensils in the world. In 1939 the company introduced the first saucepan-style pressure cooker and gave it the trade name "Presto." Since aluminumn was needed in WWII, PRESTO switched to manufacturing artillery fuses, aerial bombs, and rocket fuses. It also manufactured a line of canners for WWII victory garden and canning programs. May 1, 1953, the company name was changed to "National Presto Industries, Inc." On March 3, 1969, National Presto Industries, Inc., was admitted to the New York Stock Exchange. PRESTO's New Mexico "highly automated" factory was established in Alamogordo in 1971 at 1301 LaVelle Rd.

PRESTO's current Chairman and President of this Wisconsin company are a father and daughter who control approximately 29% of the stock, including approximately 23% held in a voting trust for family members. Tom Bernicke is the Alamogordo PRESTO plant manager. Between 1998 and 2001, total U.S. imports of household cooking appliances from China more than doubled to $640 million. This while retail prices for National Presto griddles have dropped to $29.99 from $49.99 in just three years. During 2001 PRESTO diversified to also include military products (2). And Maryjo Cohen, President of PRESTO, decided in 2001 to shut down plants in Mississippi and New Mexico and expand production in China. "We've had these plants for a very long time," she says (3). "It really hurts to say goodbye to them." In 2002, Maryjo Cohen raked in $284,000 in total compensation including stock option grants from National Presto Ind. (4 Executive Pay Watch). "National Presto still remains under investigation by the US Securities and Exchange Commission in regard to the allegations concerning violations of the Investment Company Act (5, Milwaukee JOurnal Sentinel, Apr 24 2000).

PRESTO still has Aluminum Die Casting in its Alamogordo, New Mexico plant. And National Presto has complete facilities for the vacuum die casting of aluminum parts (5a). The Alamogordo City Commissioners are trying to keep the factory open. PRESTO is working with Alamogordo to get a contract for 5 million pounds of die cast aluminum work in Mexico. The PRESTO plan is to lay off their entire work force (except 20 people at the foundry to be caretakers) until they get the Mexico contracts (6, Aug 26 2002). Tom Bernicke, the Plant Manager for PRESTO Alamogordo is leading the hunt for Mexico customers to keep the foundry open after PRESTO moved their line of products to China. New Mexico's State Department of Economic Development (Rebecca Rizzuti and Ruben Fragoso) and their trade office in Chihuahua (Armando Martinez) did a visit to Chihuahua to get some buyers (7, Aug 2002 report). Wisconsin has lost nearly 70,000 appliance manufacturing jobs since mid-1998.

U.S. imports of cookware, cutlery and kitchen tools have increased by $1 billion since 1998, to $4.45 billion. For every U.S. pan exported last year, six foreign-made pots arrived. The U.S. trade deficit - which hit a record $435 billion last year - reflected in part a $100 billion imbalance with China. (8, Content, March 1, 2003).

Fiscal years 2002 and 2001 included charges of $4,585,000 and $7,653,000, respectively, related to closing the Company's manufacturing operations in Jackson, Mississippi, and Alamogordo, New Mexico and transferring them to China (9). The Alamogoro City Commissioners on April 10th 2001 passed Ordinance 1116 to issue Industrial Revenue Bonds to the PRESTP Manufacturing Company, in something called a "Refunding Series 2001" (10). Mr. McCourt recommended and all six Commissioners voted "aye."

What is PRESTO financial situation? Can they afford to pay the womens' pensions? According to their annual report (11):

"During 2002, consolidated net sales increased $14,651,000 from $119,078,000 to $133,729,000 or 12%. The increase in net sales of the housewares/small appliance division of $4,768,000 largely reflects the positive impact of the expansion of 2001's regional TV advertising program on the Presto(R) Pizzazz(R) pizza oven to a national program in 2002. The defense products division (purchased at the end of February 2001) and the absorbent products division (purchased in mid-November 2001) combined to provide increased net sales of $9,883,000 during their first full year of operation. Gross profit for 2002 increased $12,282,000 from $24,959,000 to $37,241,000."

The annual report goes on to say that PRESTO underestimated its plant closing costs that could result in additional expenses during 2003.

How is PRESTO stock doing? Here is a snapshot of NPK from Yahoo:

http://chart.yahoo.com/c/2y/n/npk.gif

It looks like PRESTO made out OK when they gutted th womens' penson plans (see 5 year stock profile). As of August 1, 2003 with $208 million in cash and short-term investments, PRESTO's has a little more than $30 in cash for each of its 6.8 million outstanding shares. The stock closed at $34.01 on Wednesday (12, Aug 2003). According to PRESTO's Income Statement 2003, profits are up, with $2,053,000 net income to common shares (13). Net sales only decreased 2% ($542,000 from $22,596,000 to $22,054,000) in Quarters ended March 30, 2003 and March 31, 2002. But in this same time period, Gross profit for 2003 increased $3,170,000 from $3,057,000 to $6,227,000 (14). It is time for PRESTO executives and to stockholderspay up the 401 (k) pensions for the women of Alamogordo.

What can the Alamogordo City Commissioners do? Alamogordo city commissioners have a reputation. There is some popular radio talk-show host who refers to Alamogordo as "the crookedest town in the U.S." They are run by what others traditionally call "The Shifty Fifty." Their M.O. dates back to Oliver Lee's day, when to get what you want you just shoot the guy who is telling you no. Sonnichsen's history of the Tularosa Basin tells says the big players who settled Alamogordo were so bad that they were actually kicked out of Texas.

What has this to do with PRESTO? Alamogordo apparently did promise Presto the water they would need for their
foundry as an inducement to getting them in 30 or whatever years ago. But instead of digging the well that had been in the original plan, they opted for the easy way out, i.e. just to tap them into the city's drinking water supply. Since the city has been pulling its drinking water out of surrounding hills for decades, and destroying the surrounding eco-system by doing so, this item of information is pertinent to who live in the outlying canyons and watch their water disappear. However it is pretty typical of the city's track record in general, I would think, and of their inability to do anything in a straightforward or upfront fashion.

So, here is the request, that Alamogordo city commissioners act in a straightforward fashion to get the women their PRESTO pensions. And, bill PRESTO for the eco-destruction from a 30 year old water deal.

What can the Women of Alamogordo do about PRESTO? There is a "Notice of Determinations Regarding Eligibility To Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance" [11/22/2002] titled TA-W-42,210. The Presto Products Manufacturing Co. of Alamogordo, NM is NOT eligible (15, PDF version 2002) since its product sales continue to go up. Meanwhile, "more than half of senior executives’ total compensation, which was generally below industry norms, consisted of 'discretionary' bonuses based entirely on subjective judgment, without any formulas, defined performance criteria, or ties to shareholder value" (16, 1999 Shareholder's Rights Discussion Forum). The report also recommends, "Shareholders could request an inquiry by the SEC to determine if the company is operating as an investment company and therefore would have to be registered as such under the Investment Company Act of 1940."

If you want to get involved in PRESTO womens' pension rights, please contact Professor David Boje at peace@peaceaware.com

Also contact:

National Presto Industries, Inc. James F. Bartl
Executive Vice President
Eau Claire, WI 54703-3703
Tel. 715-839-2121
Fax 715-839-2148
715-839-2122
715-839-2242

PRESTO in Alamogordo (505) 437-7660
Fax #: (505) 437-7663
E-mail Plant manager: tbernicke@gopresto.com

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