Washington, D.C. -5 April 2009- Staff. In the latest round of government subsidies for struggling businesses, cash began to flow farther from the smoldering pit of the financial sector. The latest company to benefit from millions in cheap, guaranteed government loans? TileTech, a ceramics conglomerate responsible for most of the porcelain thrones in American households over the last century.
In a move which some observers see as reminiscent of the Government’s purchase of $600 toilet seats and $400 hammers in the Reagan era, the U.S. Treasury approved $400 million in loans for the troubled toilet maker, which will pay off a portion of the company’s debt and set aside more money for research and development. In addition, the company is now eligible for another $100 million in tax credits.
toilet
Fulton Prescot, TileTech Chairman and CEO, insisted that the company was vital to America’s economic recovery. "Certain needs will never go away, and though recent events have put our business in jeopardy, we are confident that TileTech can emerge from this crisis stronger than before," Prescot said. "America’s proud ceramic fixtures industry is essential for the economy of the future."
TileTech, America’s oldest ceramics company, was founded as New World Necessaries in Piscataway, NJ in 1892 by Hue Prescot, an immigrant who left a similar family business behind in Wales. Within two generations, the company was already the country’s premier supplier of bedpans, chamber pots and other types of household waste receptacles. Through the 1970s, the company remained as the dominant player in the flush toilet market, garnering nearly 60% of all sales. However, faced with increased competition from cheap Chinese and Indian imports, TileTech has recently fallen on hard times, with more then $2 billion in debt and sales which are down more than 40% from last year.
Janice Wong, a Treasury Department spokesperson, confirmed the bailout and argued that the sweeping action was justified. “American businesses need to be preserved, and saving TileTech will keep jobs and revenue will contribute to a recovery,” she said.
The company, which employs nearly 5,000 people across the country in factories, distribution centers and showrooms, contacted the government late last week to ask for immediate financial intervention. If the government was not willing to step in, executives said, the company would declare bankruptcy and let all current employees go. Rather than let TileTech implode and send financial ripples through the home improvement sector, Treasury officials agreed to the terms announced today.
Prescot insisted that the governments investment was sound. “TileTech is an American company, a human company,” he said. “We have been here for people and their needs for over 100 years. This is the auto industry that’s next to everybody’s magazine rack and singing bass.”
In a move which some observers see as reminiscent of the Government’s purchase of $600 toilet seats and $400 hammers in the Reagan era, the U.S. Treasury approved $400 million in loans for the troubled toilet maker, which will pay off a portion of the company’s debt and set aside more money for research and development. In addition, the company is now eligible for another $100 million in tax credits.
toilet
Fulton Prescot, TileTech Chairman and CEO, insisted that the company was vital to America’s economic recovery. "Certain needs will never go away, and though recent events have put our business in jeopardy, we are confident that TileTech can emerge from this crisis stronger than before," Prescot said. "America’s proud ceramic fixtures industry is essential for the economy of the future."
TileTech, America’s oldest ceramics company, was founded as New World Necessaries in Piscataway, NJ in 1892 by Hue Prescot, an immigrant who left a similar family business behind in Wales. Within two generations, the company was already the country’s premier supplier of bedpans, chamber pots and other types of household waste receptacles. Through the 1970s, the company remained as the dominant player in the flush toilet market, garnering nearly 60% of all sales. However, faced with increased competition from cheap Chinese and Indian imports, TileTech has recently fallen on hard times, with more then $2 billion in debt and sales which are down more than 40% from last year.
Janice Wong, a Treasury Department spokesperson, confirmed the bailout and argued that the sweeping action was justified. “American businesses need to be preserved, and saving TileTech will keep jobs and revenue will contribute to a recovery,” she said.
The company, which employs nearly 5,000 people across the country in factories, distribution centers and showrooms, contacted the government late last week to ask for immediate financial intervention. If the government was not willing to step in, executives said, the company would declare bankruptcy and let all current employees go. Rather than let TileTech implode and send financial ripples through the home improvement sector, Treasury officials agreed to the terms announced today.
Prescot insisted that the governments investment was sound. “TileTech is an American company, a human company,” he said. “We have been here for people and their needs for over 100 years. This is the auto industry that’s next to everybody’s magazine rack and singing bass.”
Source: Government Approves $400 Million Toilet Company Bailout
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