Tower Automotive requests court OK to reject collective bargaining agreements, modify retiree benefits

By Caroline Salls

Pittsburgh, Jan. 5 - Tower Automotive, Inc. requested approval to reject its collective bargaining agreements with several unions and to modify union retiree benefits amid "daunting revenue and cost challenges in an unstable market," according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company wants to reject its agreements with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America; the PACE/United Steelworkers of America; the International Union of Electronic, Electrical, Salaried, Machine & Furniture Workers - Communication Workers of America and the Smith Steel Workers, AFL-CIO; International Association of Machinists and Aerospace Workers; Technical Engineers Association; International Brotherhood of Electrical Workers, Service Employees International Union; Steamfitters Union and Chicago Regional Council of Carpenters.

Tower wants to modify the benefits of retirees represented by the official committee of persons receiving retiree benefits not covered by a collective bargaining agreement, the UAW and the IUE/CWA.

Tower said to emerge from bankruptcy it must successfully execute its business plan by both improving revenue opportunities and decreasing costs, and its unionized employees and retirees must now equitably contribute to the company's reorganization for Tower to survive.

Despite all of its restructuring initiatives, Tower said cash flow remains in the red, "leaving little doubt that a feasible plan of reorganization hinges on Tower's ability to reduce its uncompetitive labor costs."

The Novi, Mich.-based auto parts maker filed for bankruptcy on Feb. 1, 2005. Its Chapter 11 case number is 05-10578.

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