Many states have enacted stay-at-home orders to deal with the coronavirus pandemic, and those orders require nonessential businesses to shut down. SPS Technologies, which is owned by Warren Buffett’s Berkshire Hathaway, continues to operate in Pennsylvania, although there are allegations that it isn’t an essential business. What makes matters worse is that there are reports that some employees at the factory are suspected to have COVID-19.
SPS Technologies: essential or nonessential?
A source at the factory in Jenkintown, Penn. told ValueWalk that the plant makes screws. Under the Pennsylvania Essential Business Order, makers of nuts, screws and bolts are classified as nonessential businesses and ordered to close. However, the company doesn’t classify itself as a maker of screws.
In a letter given to employees, the company states that it is essential because the products it produces supply engine, turbine and power transmission.
When ValueWalk contacted SPS Technologies, a spokesperson told us they are classified under aerospace product and part manufacturing. Such businesses are considered nonessential unless they provide defense, industrial products, and transportation manufacturing.
The company did have a contract with Boeing, which would mean that it could be involved in defense products and transportation manufacturing. However, they also allege that the contract with Boeing, which involved 777X and 787s, has been suspended. When asked for further information about the Boeing contract and its classification as an essential business, no response was given. Boeing and SPS remain in a lengthy legal dispute over the contract.
Management allegedly had told employees that they were looking for a way to stay open no matter what the governor said about nonessential businesses closing. They did receive a waiver from the state allowing them to stay open, but the nature of that waiver and the business conducted at the factory remains unclear.
SPS Technologies history
SPS was incorporated in 1903, and started its Jenkintown plant in 1920. The company was purchased by Precision Castparts Corp in 2003 for $729 million. Precision Castparts was later purchased by Berkshire Hathaway for over $32 billion, making it Buffett’s largest ever acquisition.
Allegations about working condition safety
Sources at SPS Technologies in Jenkintown also told ValueWalk that the company has not been taking adequate steps to ensure the safety of its workers during the coronavirus pandemic. Further, sources say employees overheard managers speaking in hushed whispers that two employees were suspected of having the coronavirus, and one was in the ICU.
When asked about the issue, management denied that anyone at the factory had the virus. They also posted two pages of statistics showing how likely people are to die in various ways.
Sources tell ValueWalk that nothing at the factory has been cleaned, and they ran out of hand soap and hand sanitizer. Hand sanitzer has finally been added as of yesterday, per sources. They also say that after the first two employees were believed to be infected with the coronavirus, four more were thought to be infected.
Someone reported SPS Technologies to the Occupational Safety and Health Administration for the issues reported to ValueWalk. In response, a spokesperson provided this statement to ValueWalk:
“We take the health and safety of our employees very seriously, and we dispute the alleged matters in the OSHA letter. We will be responding to OSHA in due course.”