News this week that Diversified Metal Engineering (DME) is under receivership is both surprising and disappointing. The Charlottetown company was considered a manufacturing success story, especially in assembling systems for the surging craft beer market across North America and beyond.
DME also operated brewing manufacturers in British Columbia and South Carolina, and among them, built stainless steel systems for 1,600 breweries in 70 countries. Those breweries must be worried that their manufacturer, and source for parts or expansion, is in receivership.
With the craft beer market growing every year, it seemed the company had tapped into a lucrative business. DME represented much-needed diversified manufacturing jobs for the province. All seemed well.
The key concern revolves around DME’s 150 workers, suddenly without a job just before the Christmas holidays. It isn’t any exaggeration to suggest the demise of DME will have the same impact on Charlottetown and area, and this province, as the closure of the GM car plant and its 2,500 workers, will have on Oshawa and the province of Ontario. While the GM plant is on a one-year countdown to closure, the DME bombshell is immediate.
Meanwhile, the fallout continues and answers are being sought to what went wrong. The company says that a drop in revenue from increased competition, unfavorable sales agreements and significant infrastructure costs were key negative factors. And no one came forward with the estimated $5 million in new capital to keep DME afloat.
Documents filed in the P.E.I. Supreme Court show the company owes $18.1 million, and when it defaulted on payments, the Royal Bank called in receivers Monday to protect its assets. The receivers hope to find a buyer willing to reopen the plant almost immediately, setting an early January deadline to submit bids to purchase DME. The receiver also promised to pay employees any owed wages and earned vacation, a small measure of good news.
Unfortunately, the demise of DME quickly became a political football in the provincial legislature. It doesn’t help matters to play games with the future of an important business and the lives of more than 150 workers and their families.
The province said it only became aware of DME’s problems last weekend. It immediately scrambled to offer financing help before the company went into receivership Nov. 26 but it was determined the offer was not enough to keep it afloat. The government did pledge support for employees to help them find work and to help new owners take over.
The Opposition was quick to grill the government for lack of action. If the province only became aware of problems last weekend, Opposition attacks smack of political opportunism. Instead of offering suggestions to help the situation, the Opposition appeared more interested in embarrassing the government than helping employees.
It’s time for all parties to put aside the finger-pointing. It’s essential that every effort is made to sell the company to owners willing to reopen the facility as soon as possible and get those 150 workers back on the job.