Suitor emerges as Arcadia Metalcraft defaults

City attorney Michael Williams talks to the Monroe City Board of Aldermen about Arcadia Metalcraft on Thursday night.
FORREST GOSSETT
By Forrest Gossett
For the Courier Post
Posted: Mar. 6, 2020 9:08 am Updated: Mar. 6, 2020 11:11 am

MONROE CITY, Mo. | Troubled Monroe City manufacturer Arcadia Metalcraft defaulted last week on a plan to repay back utility charges but is negotiating with a company interested in taking over the business.

Monroe City Administrator Jackie Pangborn told the Board of Alderman on Thursday night that Arcadia failed make a $30,000 weekly payment on Feb. 28 as part of an agreement approved in December to settle past utility charges. That would put the company at risk of immediate disconnection of electricity and other city utilities.

Arcadia owes $160,000 of an original past-due bill of approximately $286,000.

But Pangborn said a separate company, Missouri Metalcraft, made a $45,000 deposit to keep the plant operating until April 1, while it negotiates to assume control of Arcadia, which in December had 37 active employees.

City Attorney Michael Williams, who has been talking with the attorney representing the owner of Missouri Metalcraft, said that no matter what happens with Missouri Metalcraft's negotiations, the city will be forced to write off Arcadia's $160,000 debt, though it will initiate collection efforts.

“Arcadia is no more,” Williams said as he was telling the board of discussions with Missouri Metalcraft. He said those acquisition talks would only proceed if utility service remains connected. “Otherwise, the cost of starting up again is prohibitive,” Williams said.

Williams said that Missouri Metalcraft's lawyer told him that the company expects to make a final decision to assume Arcadia's operations by March 18. He said that Arcadia owners will not likely receive any payments for the business.

“Their deal does not include assuming Arcadia's debts,” on the assumption of operations, Williams said.

The Board of Alderman, after about 15 minutes of discussions, approved accepting Missouri Metalcraft's deposit and set a special meeting to discuss the fate of Arcadia on March 16 at 6 p.m.

Arcadia, which once owed about $286,000 in past-due utility bills, was given a reprieve by the Board of Alderman in December when it approved a $20,000 weekly repayment plan for the delinquent utilities while promising to keep current bills paid on time.

The plan was on target until last week, when Arcadia missed a $20,000 payment.

“The city is still ahead by nearly $126,000 from where we were in December,” Williams said.

Arcadia is the former Continental Casting. Arcadia Vice Chairman Graham Furse, with another investor, purchased the troubled Continental in April 2017, and renamed the business in April 2018, in hopes of expanding sales for the self-described second-tier auto industry supplier. The company fabricates component parts for various car assemblies, such as power steering.

Furse closed the company's Palmyra operations, consolidating all production in Monroe City. At the time, he said that he hoped the company could double business and increase employment from 97 to more than 200.

However, the sales did not increase as hoped as employment stagnated between 90 and 100 people.

Then, on Sept. 16, 2019, more than 50,000 General Motors workers walked off the job, launching strike that was not settled until Oct. 27.

The strike cost General Motors as estimated $1.75 billion and sent shockwaves through its supply chain. Furse said that Arcadia lost most of its orders almost immediately, forcing it to lay off nearly two-thirds of workers.

Arcadia first missed utility payments in November, and after failed negotiations with the city, power was briefly disconnected in December for about a week. It was restored as the city and Arcadia worked out a repayment plan that was approved by the Board of Aldermen.

Furse did not return phone calls from the Courier Post on Thursday.

 

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