Former 'Muscle Car' Employees Demand Unpaid Wages
ReportingStephanie Lucero FARMERS BRANCH (CBS 11 News) ―
They worked on one of the most popular muscle cars in America and they say they weren't paid for the last month of their employment.
In a cbs11tv.com exclusive, there's more fallout following the investigation into dozens of vintage cars manufactured in Farmers Branch. The company, Unique Performance, has shut its doors and filed for bankruptcy, but former employees say they're owed tens of thousands of dollars in wages.
"I stayed there until the end," says Luis Deras, a former assembly technician on a custom version of the Ford Mustang called the Foose Stallion. "Pretty much it was me and two other guys that finished the last cars that we built there and it was really, really, sad."
Deras is referring to the collapse of Unique Performance. On November 1st Farmers Branch police detectives started executing search warrants at several locations where the vehicles were manufactured and stored. In all, 61 vehicles were confiscated; 58 were Shelby Mustangs in various stages of completion, three were Chevrolet Camaros. Police say the vehicles lacked adequate titles and the vehicle identification numbers had been scraped off all of the confiscated cars. No arrests were made and no charges have been filed. The case is still under investigation.
After the raid, Unique Performance locked it doors and would not answer questions about the cars seized, but employees who worked on the Foose Stallion were asked to stay on the job.
EMPLOYEE UPDATE
CBS 11 News Reporter Stephanie Lucero has spoken to numerous former Unique Performance employees who say they are owed more than $40,000 in back pay. Some of the men and women say they've been given assurances that they will be paid on December 26th. Doug Hasty is the President of Unique Performance.
"Doug is waiting for the funds to clear. That's the story we've been told," said Mike Luzader, a former program manager who worked on the Foose Stallion and the vintage Shelby Mustang. "They're waiting for the funds to clear on an 11-day hold with the bank and there's been promises made that we're going to get paid. Whether or not we see the money, is a different story."
After police seized the Shelbys, employees say work on the Foose vehicles continued. The former employees say they also helped clear the warehouses and moved materials to other locations.
STATEMENT FROM FOOSE DESIGN
The Foose Stallion Mustang is a vehicle conceptualized by famed automobile designer Chip Foose. His company, Foose Design, which is based in California, had a licensing agreement with Unique Performance and Techstar Automotive Group. Shortly after the police seizure, Foose Design terminated its licensing agreement and all business activities with Unique Performance.
In a statement issued to CBS 11 News, Foose Design said it, "Does not manufacture production vehicles. Foose Design created the concepts for prototype vehicles and licensed the right to build certain vehicles to Unique. Unique was solely responsible for dealing with customers, manufacturing the cars, as well as hiring, managing and paying its employees who worked on the cars. While Foose Design had no direct involvement with the individual cars being built at Unique Performance, Chip Foose's heart goes out to any employee who was not paid for work he or she performed. Foose Design and its attorneys are working with law enforcement and preparing their own legal claims against Unique."
DOUG HASTY
Tom Pappas, a Dallas attorney representing Hasty in the criminal case, says the former employees are "the least of the problems for him". Pappas says "I know that Doug strongly believes if he can get out of bankruptcy he'll be able to pay his debts".
Pappas says, "Many of these matters are in bankruptcy court and the decisions about who gets paid what and when belong to the bankruptcy court and the bankruptcy trustee."
Pappas would not allow CBS 11 News to speak directly to Hasty.
CARROLL SHELBY LICENSING
Legendary sports car icon Carroll Shelby pulled out of his licensing agreement with Unique Performance just days after the police raid. Carroll Shelby Licensing says Unique fell behind on customer orders for the vintage Shelby Mustangs and numerous lawsuits were filed by angry customers. Hasty claimed Shelby's company was late in delivering parts.
EMPLOYEES HAVE LITTLE HOPE
Former employees of Unique Performance say they have little hope of getting their money. They say they are owed various amounts of money and stayed, even though they didn't know when they would get a paycheck, due to their loyalty to the company and the car.
"We were passionate about it," says Alison Weber, a former material manager for the company. Weber says she feels responsible for her colleague's losses because she asked many of them to stay and complete the work, and on numerous occasions they were told the money was coming soon. Weber says they were always told a different story. "Probably in an hour, probably by the end of today, three o'clock today, four o'clock today and nothing, but please keep building these cars."
Deras says building the Foose Stallion was personal for him. "We took it very personal on the car because when I grew up I used to build model cars and I always called my dad and said, 'Hey dad, I'm building cars but now it's a real car and it's a special edition'."
The employees say they believe Unique Performance and Techstar have a responsibility to pay their unpaid wages. A spokesperson for Techstar did not return CBS 11 News phone calls.Three people have filed complaints against Unique Performance with the Texas Office of the Attorney General.
Sunday, December 23, 2007
Monday, December 3, 2007
Chrysler, VW Getting Closer?
The ink is hardly dry on the Chrysler-Daimler divorce papers, but already, another German carmaker could be waiting in the wings for the American carmaker.
David Cole, chairman of the Center For Automotive Research, said competition is forcing automakers to consider options they might not have contemplated only 12 months ago.
"There is going to be another round of mergers in the auto industry and the one company that matches up well with Volkswagen is Chrysler," he noted.
Volkswagen already has a joint project with Chrysler to develop a new minivan, which will be assembled by Chrysler in the next couple of years and will be sold in the U.S.
"VW needs a strong presence in North America. In a complimentary and synergistic relationship, Chrysler has got a lot to offer. The scale that General Motors and Toyota have are absolute killers. The only thing you can do is match up to them. GM will have taken $5,000 out of the cost of a car soon," Cole noted.
Carlos Ghosn, the chairman of Renault/Nissan, has expressed an interest in Chrysler, Cole said. Ghosn said he had not spoken with anybody at Chrysler about an alliance. However, he noted, for strategic reasons, the Renault-Nissan alliance needed to bolster its relatively small presence in North America.
Cole, however, said there is little doubt VW is going to have to move quickly to develop a new North American strategy. A new study by CAR indicated autoworkers in western Europe are making almost $10 more per hour than their counterparts in the U.S. The study was finished even before the U.S. dollar began its most recent slide.
Until now, Europeans carmakers have been able to fend off the challenge by charging a premium for their vehicles and with hedging strategies in which they built different pieces of the vehicle in other parts of the world where labor costs are lower.
VW had operated an assembly plant in western Pennsylvania during the 1980s but shut it down in the late 1980s after sales of the VW models built at the factory dropped sharply. By the time it closed, the utilization of the Pennsylvania plant had dropped to under 40 percent. Since then, VW executives have talked about building cars in the U.S. again, but few observers believed they were serious since the employee representatives on the company's board of supervisors opposed the idea.
However, with the euro trading at $1.50, the idea has taken on a new urgency. Volkswagen is at the point where it needs to build more vehicles in North America if it is serious about expanding sales in this market because it will becoming too expensive to export from Europe to the U.S., Cole said.
"The euro is a killer," he said.
Meanwhile, VW officials have confirmed that the German automaker is considering building a new plant in North America.
VWoA Chief Executive Stefan Jacoby said at the Los Angeles Auto Show last month that the company would offer more details on possible plans for additional North American production capacity within the next six months.
"There are a number of factors that we need to consider in this decision and we will make an announcement in the next six months on whether or not we will proceed with this initiative," he said.
One possibility, VW officials noted, is to expand the company's existing North American plant in Puebla, Mexico. Cole, however, said the Mexican plant specializes in small cars and VW probably wants to use a new plant for a very different product - one that could broaden its appeal to consumers.
"If they want to sell a million vehicles in the U.S., they're going to have to do something else," he said.
VW announced last week it planned to invest $14.1 billion over the next three years in new products, plants and production capacity. The Volkswagen Passenger Cars unit will invest more than half the money - $9.6 billion - in new products, a company statement said.
Another $2.5 billion was set aside for new production plants in India and Russia and a paint shop in Pamplona, Spain. Another $711 million will be spent at its main plant in Wolfsburg. The statement, however, didn't contain any specific information about North America and the ultimate decision on the company's future strategy could be scrambled or delayed by a new investigation by German authorities into the activities of VW's top executives.
David Cole, chairman of the Center For Automotive Research, said competition is forcing automakers to consider options they might not have contemplated only 12 months ago.
"There is going to be another round of mergers in the auto industry and the one company that matches up well with Volkswagen is Chrysler," he noted.
Volkswagen already has a joint project with Chrysler to develop a new minivan, which will be assembled by Chrysler in the next couple of years and will be sold in the U.S.
"VW needs a strong presence in North America. In a complimentary and synergistic relationship, Chrysler has got a lot to offer. The scale that General Motors and Toyota have are absolute killers. The only thing you can do is match up to them. GM will have taken $5,000 out of the cost of a car soon," Cole noted.
Carlos Ghosn, the chairman of Renault/Nissan, has expressed an interest in Chrysler, Cole said. Ghosn said he had not spoken with anybody at Chrysler about an alliance. However, he noted, for strategic reasons, the Renault-Nissan alliance needed to bolster its relatively small presence in North America.
Cole, however, said there is little doubt VW is going to have to move quickly to develop a new North American strategy. A new study by CAR indicated autoworkers in western Europe are making almost $10 more per hour than their counterparts in the U.S. The study was finished even before the U.S. dollar began its most recent slide.
Until now, Europeans carmakers have been able to fend off the challenge by charging a premium for their vehicles and with hedging strategies in which they built different pieces of the vehicle in other parts of the world where labor costs are lower.
VW had operated an assembly plant in western Pennsylvania during the 1980s but shut it down in the late 1980s after sales of the VW models built at the factory dropped sharply. By the time it closed, the utilization of the Pennsylvania plant had dropped to under 40 percent. Since then, VW executives have talked about building cars in the U.S. again, but few observers believed they were serious since the employee representatives on the company's board of supervisors opposed the idea.
However, with the euro trading at $1.50, the idea has taken on a new urgency. Volkswagen is at the point where it needs to build more vehicles in North America if it is serious about expanding sales in this market because it will becoming too expensive to export from Europe to the U.S., Cole said.
"The euro is a killer," he said.
Meanwhile, VW officials have confirmed that the German automaker is considering building a new plant in North America.
VWoA Chief Executive Stefan Jacoby said at the Los Angeles Auto Show last month that the company would offer more details on possible plans for additional North American production capacity within the next six months.
"There are a number of factors that we need to consider in this decision and we will make an announcement in the next six months on whether or not we will proceed with this initiative," he said.
One possibility, VW officials noted, is to expand the company's existing North American plant in Puebla, Mexico. Cole, however, said the Mexican plant specializes in small cars and VW probably wants to use a new plant for a very different product - one that could broaden its appeal to consumers.
"If they want to sell a million vehicles in the U.S., they're going to have to do something else," he said.
VW announced last week it planned to invest $14.1 billion over the next three years in new products, plants and production capacity. The Volkswagen Passenger Cars unit will invest more than half the money - $9.6 billion - in new products, a company statement said.
Another $2.5 billion was set aside for new production plants in India and Russia and a paint shop in Pamplona, Spain. Another $711 million will be spent at its main plant in Wolfsburg. The statement, however, didn't contain any specific information about North America and the ultimate decision on the company's future strategy could be scrambled or delayed by a new investigation by German authorities into the activities of VW's top executives.
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