Fingerhut hearings held at Capitol

ST. PAUL -- Fingerhut Cos. hasn't closed its doors yet, but politicians already were scampering on the second day of the 2002 session to help workers who may be laid off at the catalog retailer.

Senate and House committees held hearings on the issue Wednesday, while Gov. Jesse Ventura played host to a meeting with executives from Fingerhut and its parent company, as well as officials from St. Cloud.

"We've got a real explosive situation here," said Rep. Leslie Schumacher, DFL-Princeton.

Democrats have drafted a couple of proposals that would benefit Fingerhut employees. The first would restore resources available within the state's dislocated worker program to the higher level it was at two years ago. The second proposes transferring $95 million from the state's workers compensation fund to the dislocated worker program.

Rep. Jim Knoblach, R-St. Cloud, agreed that using some money from the workers compensation program seemed appropriate, but said the amount DFLers are proposing may be too much.

"There is a budget deficit," Knoblach said.

Officials say the dislocated worker program needs about $30 million to handle its current load. But Democrats argue that doesn't take into account potential layoffs at Fingerhut or Kmart, for instance.

Lawmakers from both sides of the aisle with a direct interest in what happens to Fingerhut employees planned to meet Friday morning to discuss options.

Fingerhut's parent, Cincinnati-based Federated Department Stores Inc., announced on Jan. 16 that it would shut down Minnetonka-based Fingerhut unless a buyer could be found. A shutdown would mean 4,700 people statewide -- including 2,700 in St. Cloud -- would be out of jobs. Another 1,300 people in Tennessee are affected.

Since the announcement, several potential buyers have emerged for Fingerhut and have been referred to Federated's investment banker, Credit Suisse First Boston.

Two Fingerhut and two Federated officials met Wednesday with the governor, St. Cloud's new mayor, John Ellenbecker, and Sen. Dave Kleis, R-St. Cloud.

Afterward, company officials wouldn't talk to reporters. But others present said the meeting went well.

Kleis said his main concern heading in was whether Federated was committed to selling Fingerhut intact instead of breaking it up.

"We have those assurances today," he said.

Asked whether she thought Federated was serious about finding a buyer for Fingerhut, state Economic Development Commissioner Rebecca Yanisch said, "If the intent on January 16th was to get peoples' attention, it worked."

Yanisch said the governor has made it clear, though, that the state won't be getting involved in negotiations.

Last week, many employees in Fingerhut's core catalog business were given the 60-day notice required under the federal Worker Adjustment Retaining and Notification Act that their jobs could end.

Yanisch told senators Wednesday that state experts have examined Fingerhut's assets and found that the catalog retailer is far more valuable to the state as a single company than it would be if sold off in parts.