Intermet looks to reject collective bargaining agreements, terminate retiree welfare plans

By Jennifer Lanning Drey

Portland, Ore., March 10 - Intermet Corp. requested court approval to reject its collective bargaining agreements with two of its unions and to terminate retiree welfare plans in light of uncertainty surrounding its future, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The company said it wants to reject the collective bargaining agreements with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and the Glass, Molders, Pottery, Plastics and Allied Workers International Union unless they agree to eliminate provisions related to pension benefits.

In addition, Intermet is looking to terminate providing retiree welfare benefits to existing retirees as of May 31 unless representatives of the retirees reach an agreement with the company that will allow it to successfully conclude its Chapter 11 bankruptcy case.

Intermet said it is in "extreme financial distress" with costs that far exceed revenues, and its prospects for continuing as a viable business entity remain bleak.

Even with permanent relief from the high labor and retiree costs, the company said its future remains highly uncertain.

"Absent this sacrifice, however, Intermet will surely fail and its employees and creditors will likely be left with nothing," the company said in the filing.

Intermet said it is hopeful that through the measures, it will be able to survive the depressed economic environment long enough to either conclude an asset sale or attempt to reorganize on a stand-alone basis.

A hearing has been scheduled for March 23.

Intermet, a Fort Worth, Texas-based automotive cast component supplier, filed for bankruptcy on Aug. 12, 2008. Its Chapter 11 case number is 08-11859.

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