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I thought I would pass along a "real world" situation that some of the folks here might find of interest. I hope this doesn't turn into a political debate - maybe I'm still a bit naive. I merely want to pass on some facts for people to do with what they will.
I have a client who currently operates about six plants scattered across four states, ranging from the east coast to the west coast. Like most companies in the current economic condition, they are faced with falling demand and the need to reduce costs. They conclude that this isn't a six-month blip but the shrunken markets they are currently operating in will be around for years, not months. That means they have excess capacity, which is a situation that requires immediate attention. Excess capacity means they have to shut a plant, and there is a clear choice as to which plant is the one to close.
There are, however, a couple of products made at that plant for which there is still a market. Those products aren't a big line of business, but those products are profitable and they don't want to exit that market. So they want to move production of those products to one of the plants that will remain open. One of the reasons for doing this is because the plant to which they want to relocate production formerly produced those products. The equipment to make the product is still in place and fully functional; it just hasn't been used for about six or seven years.
So the company decides they want to turn that equipment on once again. There isn't any change in the equipment; they just want to flip the switch and start it up again.
*****
"Wait a minute", the state air quality people say. "You can just turn on a piece of equipment even though you have a permit from us to operate that equipment. If you didn't use that equipment for 18 months, restarting that equipment is the same thing as if you were installing that equipment from scratch. You need to apply for a new permit."
We say, where does it say in the regulations or the law that a permit expires if a piece of equipment is shut down for 18 months?? Where does it say in our permit that the permit to operate the equipment is invalid if we don't operate the equipment for 18 months.
Well, the state folks, say, "it doesn't say that. But since the permit was issued our policies have changed."
We say, "wait a minute, we have a permit that gives us a right to operate a piece of equipment as long as we meet certain conditions." The permit does not say, " this permit expires if the equipment is shut down for 18 months." It doesn't say, "this permit expires in 2005 if the equipment is not operated".
They say, in essence, "Tough. Our policies have changed since we issued the permit. If you want to use the equipment you need to apply for a new permit."
****
We're pretty sure that if we appealed this we would win. The agency simply does not have the power to past facto add conditions to a permit. But that would be a Pyrrhic victory. The problem that we are dealing with is that obtaining a new permit is a four to six month process. The other plant will be shut down by then. If the new plant can't operate, they will be unable to supply customers and the custoers will go elsewhere. If we appeal, in about one year we might get a decision that we didn't need a permit. One year doesn't really gain us anything; that's even worse than applying for a permit, which would give us an ability to operate in six months. But even six months is too long.
The client is still trying to decide what they are goig to do . But if I and my cohorts can't come up with a way that they can get the equipment up and running in four months, they will likely simply drop the line of business.
That's about 20 good-paying union jobs with full benefits that disappear out of the company. Where do those jobs go??? If my client doesn't supply the product who does supply the customers??? Knowing the industry our best guess is that those jobs are going to go outside the US, most likely Mexico or Central America.
******
The frustrating thing for me in this is that what the company wants to do is fully within the law. There is no law that says that if equipment is shut down for 18-months you need to consider that as if it were new construction. There is no regulation adopted by the agency saying that.
All we have is a some government employees who got together in a room and decided by fiat they were going to do things differently.
It gets even better. The folks in the agency are absolutely convinced in their own minds that by doing this they are creating a program that increases flexibility for businesses to operate.
We point out to them that other states, operating under the same set of federal rules don't operate the same way.
****
But that's like trying to tell Nadya Suleman that having more babies isn't a good idea. It just doesn't register.
And 20 blue collar jobs paying about $40,000 per year with full benefits look as if they are about to head across the border, where they will be filled by people being paid about $5000 per year with no benefits.
I have a client who currently operates about six plants scattered across four states, ranging from the east coast to the west coast. Like most companies in the current economic condition, they are faced with falling demand and the need to reduce costs. They conclude that this isn't a six-month blip but the shrunken markets they are currently operating in will be around for years, not months. That means they have excess capacity, which is a situation that requires immediate attention. Excess capacity means they have to shut a plant, and there is a clear choice as to which plant is the one to close.
There are, however, a couple of products made at that plant for which there is still a market. Those products aren't a big line of business, but those products are profitable and they don't want to exit that market. So they want to move production of those products to one of the plants that will remain open. One of the reasons for doing this is because the plant to which they want to relocate production formerly produced those products. The equipment to make the product is still in place and fully functional; it just hasn't been used for about six or seven years.
So the company decides they want to turn that equipment on once again. There isn't any change in the equipment; they just want to flip the switch and start it up again.
*****
"Wait a minute", the state air quality people say. "You can just turn on a piece of equipment even though you have a permit from us to operate that equipment. If you didn't use that equipment for 18 months, restarting that equipment is the same thing as if you were installing that equipment from scratch. You need to apply for a new permit."
We say, where does it say in the regulations or the law that a permit expires if a piece of equipment is shut down for 18 months?? Where does it say in our permit that the permit to operate the equipment is invalid if we don't operate the equipment for 18 months.
Well, the state folks, say, "it doesn't say that. But since the permit was issued our policies have changed."
We say, "wait a minute, we have a permit that gives us a right to operate a piece of equipment as long as we meet certain conditions." The permit does not say, " this permit expires if the equipment is shut down for 18 months." It doesn't say, "this permit expires in 2005 if the equipment is not operated".
They say, in essence, "Tough. Our policies have changed since we issued the permit. If you want to use the equipment you need to apply for a new permit."
****
We're pretty sure that if we appealed this we would win. The agency simply does not have the power to past facto add conditions to a permit. But that would be a Pyrrhic victory. The problem that we are dealing with is that obtaining a new permit is a four to six month process. The other plant will be shut down by then. If the new plant can't operate, they will be unable to supply customers and the custoers will go elsewhere. If we appeal, in about one year we might get a decision that we didn't need a permit. One year doesn't really gain us anything; that's even worse than applying for a permit, which would give us an ability to operate in six months. But even six months is too long.
The client is still trying to decide what they are goig to do . But if I and my cohorts can't come up with a way that they can get the equipment up and running in four months, they will likely simply drop the line of business.
That's about 20 good-paying union jobs with full benefits that disappear out of the company. Where do those jobs go??? If my client doesn't supply the product who does supply the customers??? Knowing the industry our best guess is that those jobs are going to go outside the US, most likely Mexico or Central America.
******
The frustrating thing for me in this is that what the company wants to do is fully within the law. There is no law that says that if equipment is shut down for 18-months you need to consider that as if it were new construction. There is no regulation adopted by the agency saying that.
All we have is a some government employees who got together in a room and decided by fiat they were going to do things differently.
It gets even better. The folks in the agency are absolutely convinced in their own minds that by doing this they are creating a program that increases flexibility for businesses to operate.
We point out to them that other states, operating under the same set of federal rules don't operate the same way.
****
But that's like trying to tell Nadya Suleman that having more babies isn't a good idea. It just doesn't register.
And 20 blue collar jobs paying about $40,000 per year with full benefits look as if they are about to head across the border, where they will be filled by people being paid about $5000 per year with no benefits.
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