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How Banks and Politicians Let One Company Come Back from the Dead to Keep Abusing Workers

One sweatshop steel company endangered workers, stiffed creditors, got government contracts--and when caught, simply wiped its slate clean with bankruptcy.

Photo Credit: AFP


The rich are different, and so are their bankruptcies. For most Americans, politicians and banks have made bankruptcy an onerous, embarrassing process with lifelong consequences. But bankruptcy means something very different if you’re a giant corporation like American Airlines, which is wringing millions in concessions out of unions after filing for bankruptcy with $4 billion cash on hand – or if you’re a regional sweatshop like Pennsylvania’s W & K steel. . The family that ran W & K has repeatedly gotten caught burning their creditors and endangering their employees. Their business even drew a boycott from its hometown County Council. But now they’re doing just fine, because politicians and banks keep giving them money. A bank they stiffed allegedly took months to make them give up equipment serving as collateral on an unpaid loan – while moving to foreclose on four hundred-plus area homes.

Rather than driving them out of the industry, a bankruptcy last year let the family wipe out debts, shed the label “sweatshop,” and get back to work doing taxpayer-funded construction.

Wilhelm’s Steel Sweatshop

Along with OSHA citations and various lawsuits, Edward Wilhelm has been involved in at least six bankruptcies since 2001. Most recent: W & K Steel, his steel fabrication company, and W & K Erection, his steel erecting company operating from the same Pittsburgh-area address in Pennsylvania’s Allegheny County. In February of 2011, Allegheny County’s Council passed a resolution declaring it would do no business with W & K. The Council cited evidence from workers that exposed conditions contrary to its “anti-sweatshop” policy, including “testimony suggesting that at least some refugee employees are paid roughly half the amount paid to US-born employees, leaving those refugees to depend on public assistance for the basic necessities of life.”

(Many of W & K’s employees were refugees from Burma and elsewhere. The website for the state of Pennsylvania’s Refugee Resettlement Program tells employers that refugees bring “strong work ethics” and “employer tax credits and training incentives are available in many cases.”)

Edward Wilhelm told the Pittsburgh Post-Gazette that Council’s action was “kangaroo court.” His wife Celeste, the company’s human resources manager, said that no council members had visited the plant before voting. But the Council’s resolution noted that W & K had “refused to allow access to the plant” to members and clergy who had shown up seeking to check out the working conditions.

Among those bringing the issue to Council were two W &K employees, Timothy Hand and Aung Oo, who went on strike against the non-union company starting in 2009. In a statement, Oo said, “There is no safety in the plant and I am afraid of being hurt and not being able to support my family.”

Hand says that over ten years at W & K, he witnessed constant safety issues: Workers standing on pallets to avoid the water pooled on the floor. Water sliding down the walls and into electrical panels. No safety glasses, and little ventilation, as workers sprayed toxic chemicals. Once, says Hand “we were actually told by the shop safety supervisor to stop spraying” because Celeste Wilhelm was on the shop floor, and she was pregnant.

In a statement, former W & K employee Sean Lehr-Nuth echoed Hand’s concerns: “I was never shown where to get a respirator, ear plugs, or safety glasses; work gloves were the only safety equipment I had access to. The roof leaked and when it rained, large puddles would gather on the floor, often near wall outlets. The electrical system was very outdated and the outlets were often loose in their housing or even hanging off the wall.”