Tower Automotive Kendallville facility closing transition agreement approved

By Caroline Salls

Pittsburgh, April 26 - Tower Automotive Inc. obtained court approval of a transition agreement in connection with the closing of its Kendallville, Ind., facility, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company said it expects production at the Kendallville facility to stop in June, and minimal wind-down activities will continue through August.

Under the transition agreement:

• Bargaining unit employees will maintain their seniority under the collective bargaining agreement and will be entitled to severance pay if laid off because of the plant closing;

• Employees will be entitled to severance pay equal to 20 hours of pay for each year of service, capped at 26 years of service;

• Employees with less than one year of service will be entitled to one week's pay;

• The company will pay for any remaining vacation in the payroll period immediately following termination;

• Health and dental contributions will be provided for the same period as outlined in the collective bargaining agreement, and the company will continue to pay all sickness and accident and short-term disability benefits;

• The local parties can negotiate a voluntary layoff system, provided that no transition agreement rights can be considered waived by any employee who elects to take a voluntary layoff; and

• If Tower reopens the Kendallville facility within three years of closing of the transition agreement, it will grant a hiring preference to bargaining unit employees affected by the plant closure who apply within 45 days of a public notice of reopening.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.