2016-06-17 / Front Page

City council declines to discuss Fairchild sale

By Wm. Duke Harrington
Staff Writer

SOUTH PORTLAND — Rumors that have run rampant since April when Gov. Paul LePage announced that 900 jobs would soon evaporate from “a big company” in southern Maine will not be addressed openly by the South Portland City Council.

Although LePage later clarified the job losses will come from two companies, sidewalk scuttlebutt pinning the cuts at Fairchild Semiconductor got so loud, so quickly, that City Manager Jim Gailey issued a press release saying if the computer chip maker planned to leave South Portland, it was news to him.

On Monday, City Councilor Brad Fox asked his peers to schedule a workshop to address how the city might react to any large-scale layoffs at one of South Portland’s largest private employers.

“I have no idea if anyone has any information on Fairchild closing or not, but if that happens, which I think is pretty likely, do we need to have a workshop about that, because that will be seen as a big deal and people will want to know what we’re doing about it,” he said.

Fairchild entered into a merger agreement with Arizonabased ON Semiconductor on Nov. 18. That deal has been stuck in limbo ever since and, on June 10, ON announced it had extended its offer to buy all outstanding shares of Fairchild common stock for $20 per share, or about $2.4 billion. That offer is now set to expire on June 23, in the absence of any additional extensions.

In a November conference call following the announcement of the merger deal, ON president and CEO Keith Jackson said overlap between the two companies was minimal, and that the product lines of each would complement each other. However, industry analysts have predicted ON might close the South Portland site, which is older than its other factories, to eliminate redundancies. Both companies make computer chips that control power supplies in electronics, albeit in different items.

On Monday, Gailey said he is not in the loop as to when the ON/Fairchild deal might close, or what ON might then do with the South Portland computer chip factory.

“It’s going to be one of those things that the shoe is going to drop almost inconveniently,” he said. “If there’s any communication coming from the new company, it’s probably coming to the governor’s office. It’s not happening here in the city.”

“And they may keep it confidential for quite a while before they even let that information out,” Councilor Linda Cohen said, referring to the governor’s office.

By law, businesses in Maine must give a public 60-day notice before any mass layoffs.

If and when that signal comes, Cohen said the council should deal with the resulting fallout behind closed doors. At any rate, she said, it’s too soon to discuss how South Portland might react.

“I’m just concerned we’re talking about a business that has employees in this city who may not have any kind of idea about what’s going on with their company, and we’re putting it out there that there’s a possibility that that company is closing,” she said. “We should probably drop this subject because it’s probably a topic for an executive session, if we get a heads up that a big business is possibly going to close.”

Maine’s Freedom of Access Act allows elected bodies to discuss economic development behind closed doors, but “only if premature disclosure of the information would prejudice the competitive or bargaining position of the body or agency.”

South Portland has held such meetings before in likely violation of state law. Several current and former city councilors have since acknowledged that in summer 2013 they were briefed in executive session on the possible sale of the former St. John’s Catholic church on Main Street to a Massachusetts-based developer of Dunkin’ Donuts restaurants. By that fall, the council would react to neighborhood outrage over the potential razing of the church to in favor of a fast food drive-thru by offering up Sawyer Park as an alternative location. That deal was met with similar disdain by the public and never went though. Still, at the time of the secret meetings, the fact that a purchase and sale agreement had been signed on the church was not public knowledge and the city had no interest in the property, let alone a “competitive or bargaining position” that might be jeopardized by “premature disclosure” of the sale.

Still, despite that example, Mayor Tom Blake agreed with Cohen that councilors should discuss the sale and possible closure of Fairchild only out of earshot from city residents.

“It might be a bit premature to have a public discussion,” he said.

However, others on the council said Assistant City Manager Josh Reny, whose many hats include the function of economic development director, should work with the city’s economic development committee to create a plan for how South Portland might finesse any business loss with the potential to move the city’s bottom line, in order to mitigate the impact to residential taxpayers.

Councilor Eben Rose said Fairchild is not the only major player in the city due for a significant shakeup in operations.

“Pan Am (Railways) is being sold,” he said. “That’s a big entity in town and I understand it’s going to be chopped up into smaller bits.”

However, despite Fox’s motion and a second from Rose, the council took no vote on scheduling a workshop on economic crisis planning.

“I’m not sure that’s ripe for us yet,” Blake said.

Return to top