Collins & Aikman granted court OK to pay severance benefits in workforce reduction

By Caroline Salls

Pittsburgh, Oct. 13 - Collins & Aikman Corp. obtained court approval to pay severance benefits in connection with a planned reduction in workforce, according to a Friday filing with the U.S. Bankruptcy Court for the Eastern District of Michigan.

According to the motion, as part of the company's efforts to cut costs and increase operational efficiency, it has decided to implement a reduction in force.

Specifically, Collins & Aikman said it plans to reduce the number of salaried employees by about 125, representing $7.6 million in annual base salaries, to provide substantial long-term cost savings that benefit the company's estates, creditors and parties in interest.

The severance package will equal up to four weeks of pay and benefits, plus any accrued vacation.

Collins & Aikman, a Troy, Mich.-based automotive company, filed for Chapter 11 on May 17, 2005. Its case number is 05-55927.

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