Evergreen Aviation closing its doors?
Business One of countys largest employers, McMinnville-based company says its weighing its options despite sending layoff notices to employees
Evergreen International Airlines employees were notified of their employment termination and the closure of the airlines. The next day, CEO Del Smith released a contradictory statement on the matter.
While Evergreen generally does not comment on market rumor or conjecture, rumors that a decision has been made to cease operations at this time are false, Smith said in the release.
In the days that followed, multiple calls and email attempts to clarify the companys fate went unreturned. Human Resources Manager Monique Gregory said Nov. 13 that more information on the matter would be released within a day or so, but further inquiries for the information went unreturned as well.
As it stands, the McMinnville-based company is scheduled to end operations Nov. 30, as stated in a Worker Adjustment and Retraining Notification a federal requirement of companies laying off more than 100 employees filed by the company.
The closure will not affect the nonprofit companies associated with EIA, including the Evergreen Aviation and Space Museum and the nearby water park. However, an Oregon Department of Justice investigation, opened in March, is ongoing. Assistant Attorney General Michael Kron said the DOJ is not commenting on the situation at this time.
The Oregonian reported in March that the investigation was examining the relationship between Evergreens for-profit and nonprofit entities, and the transferal of money between them.
Museum Director Larry Wood told the McMinnville News-Register that at the insistence of state investigators, the nonprofit organization is untangling ties with the for-profit air cargo business, such as shared telephone systems and copier paper contracts, as reported last week.
EIA has been in financial trouble for some time. This includes unpaid judgments and debts over the past year to airline employees and vendors. In the summer, EIA was ordered to pay two judgments for overdue contributions to pilot pension plans one for $744,651 and the other for $680,359. Both went unpaid.
In August, the Air Line Pilots Association (ALPA) questioned the airlines survivability based on the amount of unpaid debt.
We have to ask, will the airline survive? With all of the judgments and liens on the company, which is paid first? Does the management team continue to ignore the judgments filed against them and default on them like our pensions? said James Touchette, chairman of Evergreens Master Executive Council at ALPA.
Evergreen has also been sued by Lumbreras Labor Services of Independence, employees, shareholders, suppliers and insurance companies. In March, the company sold Evergreen Helicopters to Erickson Air-Crane Inc. for $250 million. At the time, Smith said Evergreen would use the proceeds to pay off debts and expand the airline.
The sale of EHI provides us with needed capital to repay existing debt and gives us the liquidity to support our airline and remaining businesses, he said in a press release.
But so far, the only comment to address the companys fate is Evergreen remains committed to continuing to address the current business environment with its customers, Smith said.