lationships, but Harrison does not. Union presence in the company would not necessarily be a highly negative issue, but it would quite possibly increase costs to Irving since there will be upward pressure on benefits and wages.
At the heart of any proposal is the ability of the company to repay the debt that would be taken on. Irving has demonstrated an ability to balance its obligations in the past which is certainly a strong factor in its favor. Management at Irving is committed to maintaining high quality and customer service, and has taken on debt in the past to upgrade its facilities and to remain competitive in the market. Lenders in these projects have been repaid on time.
The difference between those projects and this one is that the timeframe is much longer in this situation, and the factors which could result in a less than satisfactory outcome are greater.
Projections are that the company would have a negative retained earnings until 1989, growing to the largest negative level in 1988. To go into an LBO situation with such a negative effect in the early years puts the repayment process in a particularly vulnerable situation. If the assumptions regarding the recession are incorrect, or if the recession lasts longer tha
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