Struggling Anchor Glass retains electric discount for N.Y. plant

Anchor Glass Container Corp. may be in crisis, but the Tampa bottlemaker recently extinguished a financial fire at its largest manufacturing plant.

For years, Anchor's 912,000-square-foot factory in Elmira Heights, N.Y., has obtained discounted electricity through a state government program designed to preserve jobs. But certain changes in the economic development program threatened to sever Anchor's cheap power as of Dec. 31.

"Receiving this power gave us the opportunity to be competitive in . . . a high-volume, low-margin industry," plant general manager Michael Sopp said in a January letter to New York State Sen. George Winner. "If we are not able to re-issue our (energy) contract, we will jeopardize the future of the Elmira plant."

The factory, one of eight Anchor facilities across seven states, employs roughly 400 people and makes more than 2-million beer, soda and other bottles a day. According to Winner, the energy discount saves the company about $1.4-million a year.

Fortunately for Anchor and about 70 other businesses whose subsidy was threatened, corporate welfare is alive and well in New York. Last month, state lawmakers approved a bill to temporarily extend the discount. It has since been forwarded to the governor for signature.

"That plant has been in this community for many, many years, so it would be a real blow to the area to lose," said Winner, who co-sponsored the legislation.

Unfortunately, it may take more than this victory to save Anchor from a third visit to bankruptcy court. The company recently disclosed that it expects to fall out of compliance with two lines of credit and may be unable to make an Aug. 15 interest payment on its long-term bonds.

600450 Struggling Anchor Glass retains electric discount for N.Y. plant
Date: 2 August 2005

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