GILROY
– Indian Motorcycle had no choice but to close its doors without
giving employees any kind of advance notice or severance pay,
Indian Board Chairman Frank O’Connell said Wednesday. Many of
Indian’s 380 laid-off employees say they feel betrayed by the
company’s quick actions.
GILROY – Indian Motorcycle had no choice but to close its doors without giving employees any kind of advance notice or severance pay, Indian Board Chairman Frank O’Connell said Wednesday. Many of Indian’s 380 laid-off employees say they feel betrayed by the company’s quick actions.
The reason Indian’s Board of Directors decided on Sept. 18 to cease production and lay off its staff was that its majority stockholder, Audax Group of Boston, decided to halt its millions of dollars of investment, according to O’Connell. At that point, O’Connell said, the company had only enough money remaining to give its employees one last paycheck and extend their health benefits for another month. Beyond that, preserving the company’s assets for its creditors became its top priority.
“There was no money in the company to pay severance,” O’Connell said. If the company had done so, he said, its creditors could have sued for distributing assets beyond what was expressly required by law. Severance pay is not required by law, according to O’Connell.
Extending employee health insurance through the end of October was an “unusual” move, O’Connell said, which “took a substantial amount of the remaining cash in the company.”
As for advance notice, O’Connell said Indian was exempt from a state labor law that requires 60 days warning when 50 or more workers are laid off. The law exempts businesses that are “actively seeking capital or business (that), if obtained, would have enabled the employer to avoid or postpone the relocation or termination.” In addition, “the employer (must) reasonably and in good faith (have) believed that giving the notice … would have precluded the employer from obtaining the needed capital or business.”
