'NY Post' Sues McClier Over Plant Problems

By: Jim Rosenberg In a lawsuit filed last month, the New York Post holds McClier Corp. responsible for problems at its new production plant in the city's Bronx borough -- notably, deficient support for the inserting operation, paper storage area and reelroom. It also named as defendants the architect and engineer McClier put on the project.

Damages the Post (Click for QuikCap) seeks in eight causes of action range from $15 million to not less than $100 million, not including interest, other expenses, and attorneys' fees.

A McClier spokesperson called the suit the Post's response to a $1.1 million breach-of-contract suit filed by McClier earlier in the year "when the Post failed to make its final payment."

The Post alleges that Chicago-based McClier failed to design or engineer parts of the plant, including concrete slabs, steel beams and trusses, "adequate to support the loads" that were expected. It claims moisture damage from an inadequate humidification system, defects in underground plumbing, and adverse effects of insufficient electrical capacity. The Post also says McClier broke its 1998 agreement by overbilling and failing to obtain specified insurance.

Post Vice President and General Manager Geoff Booth would say only that plant reconstruction "won't interrupt our day-to-day production."

At McClier, questions were referred to in-house counsel Mike Kolloway, who is away until Friday. A McClier spokesperson, however, said that "to address the issues raised by the Post, we even went so far as to hire independent technical consultants to review our performance." The consultants, said the spokesperson, confirmed that the work met professional standards and contract specifications.

"We don't believe their lawsuit has merit," said McClier's spokesperson, adding that "once these issues are litigated, we are confident that our original lawsuit for final payment ... will prevail."

According to the complaint, slabs for plant levels one and two were not in specified pour sizes and patterns and lacked the proper reinforcing bars and wire mesh. Cracks, it states, are numerous, exceed allowable widths, "and are beginning to cause the slabs to separate throughout the building."

The Post says that in its design-build role for the project, McClier assumed "complete and sole responsibility for the design and construction." It adds that McClier was further obliged to correct, at its own expense, work the Post rejected or McClier knew to be defective.

The Post says that on Dec. 31, 2003, it notified McClier of the agreement's termination owing to McClier's failure to begin correcting problems within the allowed time. The Post then retained The Austin Co. to take on corrective measures. The Post said it was forced to indefinitely delay installation of new inserters and has been deprived of at least $100 million in estimated revenue.

Though so far the damage appears to be "just cracks," it is "much more serious," said Daniel Erni, Post project manager for mailroom equipment maker GMA. "Basically, the whole first floor gets torn out ... and replaced," Erni said last week by telephone from Switzerland, where he met with GMA parent company Muller Martini, maker of the Post's Newsliner inserters.

Coordinating rebuilding with ongoing inserting, said Erni, "is really difficult," and the job could last more than 18 months. GMA temporarily will remove some equipment to allow construction in an area, then re-install the equipment and remove other equipment for work elsewhere.

Erni said uninterrupted production is largely a result of the amount of equipment the Post possesses and to its weekday preinserting into jackets that are stored for Saturday night unwinding into the Sunday edition.