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Jore asks for bailout to stay in Ronan

Company says it might move without $20 million loan

RONAN – The new Jore Corp. wants a $20 million, government-subsidized loan or else it might
shut down its manufacturing plant in Ronan and move its plant and equipment "off-shore," local
economic-development officials said in a request for help from political leaders dated Thursday.

By JOHN STROMNES of the Missoulian

Billie Lee, executive director of the Lake County Community Development Corp., said Friday
the memo obtained by the Missoulian was still in "draft" form and subject to minor revision, but
would be given to Sen. Max Baucus, D-Mont., during his visit to Ronan on Friday. A Jore
spokesman on Friday confirmed the details of Jore’s request for government financing assistance.

According to the memo, Frank Tiegs, the new owner of Jore, told Lake County business and
community leaders recently that if they want to keep Jore operating in the Mission Valley, where
it employs almost 300 people, Jore needs a $20 million, 15-year, 3-percent fixed-term loan from
public entities such as the Montana Board of Investments and the Lake County Community
Revolving Loan Fund. Tiegs’ Western Mortgage and Realty Co. of Pasco, Wash., bought Jore
for $32.9 million at bankruptcy auction in Missoula in April.

Tiegs has declined requests from the Missoulian for an interview.

"Like any prudent business person, Frank Tiegs and Western Mortgage have expressed that they
will do whatever it takes to make New Jore Corporation profitable on a continuing basis. This
may include moving the company elsewhere if that is needed in order to make and keep Jore
competitive," said Lake County Community Development Corp. President Jerry Kurzenbaum in
the memo.

Tiegs has wasted no time in seeking government help to return Jore to profitability. Shortly after
the sale, Tiegs asked the Lake County Commission to accept $750,000 as full payment on Jore’s
delinquent property taxes of $939,100 accumulated over the last 18 months. The commission will
meet Tuesday in Polson to discuss this request and others relating to possible future tax breaks
for Jore as well as "forgiving" some $45,000 in interest and penalties on the existing tax liability.

Kurzenbaum said financing of Jore is one of Tiegs’ "priority issues" to return the company to
financial health.

"He feels that those who stand to benefit from this effort to make New Jore Corp. work (i.e. the
community) should be of assistance in procuring funding at rates he has determined he needs to
offset the higher costs of doing business here," Kurzenbaum said.

Some of the factors that make the Ronan location less than competitive include transportation
costs, labor costs, and excessive plant and equipment costs. Jore managers are dealing with
excessive plant and equipment costs, and labor costs have been drastically reduced over the last
year by laying off some employees. Profitability has returned over the last four months.

Still, labor costs and transportation put the plant in the Mission Valley at a competitive
disadvantage, according to Kurzenbaum.

"As we all know, U.S.-based manufacturers are under constant pressure from the effects of
cheap off-shore labor," Kurzenbaum said. And Ronan is far removed from major U.S.
transportation hubs that supply U.S retail home-improvement stores, where most of Jore’s
products are sold.

The Lake County community development group has agreed to seek government subsidies,
either in loans or grants, to help Jore, predicated on Jore’s commitment to retaining current jobs
and increasing jobs by maintaining operations in the Mission Valley, Kurzenbaum said.

"Our current strategy (to help in financing) includes utilizing Community Development Block
Grant revolving loan funds and two Montana Board of Investment loan programs," Kurzenbaum
said.

But these will not be enough to reach the target equivalent of a $20 million loan at 3 percent over
15 years, said Kurzenbaum in his memo to political leaders.

"We need your assistance in finding approximately $5 million in 0 percent loan or grant funds
which can then be lent to New Jore, presumably through the Lake County Community Revolving
Loan Fund," Kurzenbaum said.

Even before the bankruptcy was settled, the local community development corporation, in
cooperation with a similar group in Missoula County, said it would request $1 million for the
revolving loan fund to help out Jore, should it emerge successfully from bankruptcy. The Lake
County commissioners and the Ronan City Council agreed to sponsor that request. The source of
these funds is from the federal government, not local property taxes.

"The challenge before us now is to make certain that the company and its jobs remain in
Montana," Kurzenbaum said in the memo.

Reporter John Stromnes can be reached at 1-800-366-7186 or [email protected].

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