once among the largest sellers of electronic equipment in the nation -- is in the process of being liquidated and most of its 35-member work force will be terminated Friday.
Summit President William D. Earnst this week told a staff meeting there was little remaining work to do, and that about 29 people would be laid off Friday. The firm's offices are located at 916 Main St.
Local economic developers are skeptical that they will be able to fully recover the $640,432 that Summit owes the Erie County Industrial Development Agency and the Buffalo Enterprise Development Corp.
In 1989, both agencies backed Earnst's purchase of the Allentown firm with loans totaling $750,000. Since then, he has mainly paid the interest on the loans.
In an interview Wednesday, Earnst blamed his company's woes on several factors, including a prolonged economic downturn in New York State, a move by parts manufacturers to reduce their distributor network to only a handful of large firms, and hard times at some of Summit's key customers.
"We've lost a considerable amount of sales in the last two to three years," he said. "But we aren't closing our doors, and we intend to fill customer orders."
Summit is winding down by not accepting new work orders for electronic parts. But Earnst said he may need to call back a few employees to wrap up the remaining transactions.
"Some people possibly could be rehired. I also hope we can continue this (company) in a different form" in the future, he said.
He denied any knowledge of Summit's pending liquidation by M&T Bank, and referred all such questions to the bank.
But ECIDA Executive Director Ronald W. Coan confirmed that he received a notice Wednesday from M&T, telling him that Earnst had defaulted on a loan and that liquidation proceedings were imminent.
"We've known for some time that Summit was in trouble," Coan said. He also explained that if Summit is unable to pay the $440,277 it owes to the county, taxpayers won't have to pay the tab.
Eight years ago, the ECIDA had high hopes for Summit. The company had been ranked among the top 50 electronic distributors in the United States for a decade. It had a payroll of 95 people, and expected to hire 15 more in 1990-92.
There was similar optimism on the
part of the city's enterprise development agency.
Summit currently owes $200,000 to BEDC, and the agency's loan committee was expected to meet today to discuss how to recover some of the money, according to BEDC President Daniel Bicz.
"But our first priority is to work out something with the company to assist them to maintain the employment," he said.
Local 55 of the United Auto Workers, which represents Summit employees, also would like to meet with the company's management to explore ways of avoiding layoffs.
Geraldine Ochocinska, assistant director of UAW-Region 9, said the rank and file was told Summit would close on Friday due to foreclosure by M&T Bank. Summit management never told the union about its plans, she said. Earnst, the company president, disputed this.
"We are the bank involved with the loan to Summit," said M&T spokeswoman Nancy E. Brock, "and we are attempting to work with the company. We haven't initiated foreclosure proceedings," she said.
Ms. Brock declined to comment on reports that M&T is pushing for Summit's liquidation, citing the bank's policies concerning customer confidentiality.