Dana seeks approval to terminate unvested benefits of non-union retirees

By Caroline Salls

Pittsburgh, Feb. 13 - Dana Corp. requested court approval to terminate the unvested non-pension benefits of non-union retirees, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Dana said it currently offers non-pension retiree welfare benefits to its non-union retirees, including hospital, medical, surgical, dental, prescription drug, vision, hearing and life insurance.

In addition, current non-union active employees employed by the company on or before Dec. 31, 2003 may be entitled to be covered under one of the company's non-pension retiree benefit plans at retirement.

The company said it is looking to terminate the unvested non-pension retiree benefits for non-union retirees as of April 1 and for the non-union employees to the extent they become eligible for the retiree benefits in the future.

According to the motion, the benefits are a tremendous financial strain on the company, costing it $37.9 million in 2006 and representing a $424 million liability on its balance sheet.

The company said termination of the benefits will immediately allow it to save more than $3 million per month and enhance its prospects of a timely successful reorganization.

A hearing is scheduled for March 6.

Dana, a Toledo, Ohio-based supplier of components, modules and systems to vehicle manufacturers and related aftermarkets, filed for bankruptcy on March 3, 2006. Its Chapter 11 case number is 06-10354.

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