Golden Aluminum vp: Crown deal remains on

FORT LUPTON – Financial woes plaguing the world’s largest manufacturer of packaging containers have called into question the company’s intent to go through with plans to purchase Fort Lupton-based Golden Aluminum Inc.

But a local official with Golden Aluminum says the deal’s still on.

In a press release issued Sept. 23, Crown Cork & Seal Inc. announced plans to lay off 2,700 employees, about 7 percent of its work force.

SPONSORED CONTENT

Empowering communities

Rocky Mountain Health Plans (RMHP), part of the UnitedHealthcare family, has pledged its commitment to uplift these communities through substantial investments in organizations addressing the distinct needs of our communities.

Citing lackluster earnings largely due to over capacity caused by weak market conditions, sluggish economies abroad, weak foreign currencies and poor weather conditions as the reason for the layoffs, the Philadelphia-based company announced that it would incur a $121 million charge to cut the jobs.

Crown has authorized the repurchase of about 7.5 percent of its outstanding preferred and common shares worth more than $300 million and announced that it will cut capital spending by as much as $300 million in the next few years.

In March 1997, Crown assumed operations of Golden Aluminum from ACX Technologies Inc. of Golden. The company paid $10 million with the option to buy the Fort Lupton plant by March 1, 1999, for a total of $60 million.

No official word has been released concerning the purchase, but Joe Toscano, Golden Aluminum vice president and plant manager, said that Crown’s recent job cuts and money-saving measures shouldn’t affect its deal with ACX.

“We haven’t heard anything from Crown saying the deal was off,” Toscano said, “but there have been talks about business plans for next year, and considering our level of participation, it seems unlikely that they wouldn’t go through with the purchase.”

The Fort Lupton plant is one of two Golden Aluminum facilities that Crown is buying. The other is in San Antonio, Texas. The Fort Lupton plant employs just more than 200 workers and makes about 60 million pounds of rolled up aluminum sheet for food and beverage lids a year, Toscano said. About 25 million pounds of that goes to Crown, but the rest goes to different companies.

“We make everything from Spam lids to lids for baby formula, but we have other products as well. For example, We’re the sole supplier of aluminum shudders for computer disks for 3M,” Toscano said. “Even if Crown decided not to make the purchase, we’d still be in business. We’re producing as much as we possibly can right now “

Crown vice president Craig Calle declined to speculate on whether the deal would go through, adding that the company would not comment on individual operations.

On Sept. 23, Standard & Poor’s placed Crown on CreditWatch with negative implications, and the company’s stock fell $6, or 16 percent, to $31.31

However, in its published release, Crown said it expects to generate $1 billion in discretionary cash flow during the next two years.

Crown Cork & Seal operates more than 140 plants in 43 countries, employs more than 50,000 people and has annual sales of about $8.5 billion.