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Support Global Action on Aging!
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Special Metals might cut pensions Federal organization will help, but retirees
wouldn’t get as much benefits By Jim Ross The Herald-Dispatch, April 27, 2003
Special Metals Corp. likely will terminate its pension plans soon, leaving hundreds of people in the area worried they might have to live on less. In a letter for employees and retirees mailed last week, T. Grant John, president of Special Metals, said pension funding obligations are $42 million more than previously expected. The pension obligations would prevent the company from emerging from Chapter 11 bankruptcy protection, the letter said. "As a result, it is quite likely that the company’s current pension plans will be discontinued," John’s letter said. The letter also said a buyer has been found for the company, but the buyer does not want to take on the pension obligations. "We do not believe any bidders or financial buyers would take on this obligation, and we do not believe the company is financially capable of continuing the pension plans on a standalone basis. Therefore, it is highly likely that the pension plans will not survive the reorganization process," the letter said. Should Special Metals discontinue its pension plans, its obligations would be picked up by the federal Pension Benefit Guaranty Corp. The PBGC will guarantee some benefits, but it might not provide as high a monthly benefit to all retirees as they are now getting, an attachment to the letter said. John’s letter came as talks are going on about the future of the company. No one directly involved in the negotiations is talking about what’s being discussed, but workers and retirees are saying the new buyer wants the union to accept a $2-an-hour pay cut and take some reductions in benefits. The local chapter of Steelworkers Organization of Active Retirees met Tuesday at the Local 40 union hall in Guyandotte to talk about the pension changes. Ray Adkins, a retiree who was on the negotiating committee for seven contracts during this 35-year career at what is now Special Metals’ Huntington works, said most retirees have little to worry about regarding their pensions. The PBGC may need a month or two to get all the amounts right on the checks, but it will provide most people with the checks they are used to getting, he said. But the pensions and the possibility that health benefits will be reduced worry some active workers. "I was looking at retirement in 10 to 12 months. I’ve got to work another 10 years, because the supplement’s gone," said Ron Jones, an active employee. Special Metals, the world’s largest and most-diversified producer of high-performance nickel-based alloys, filed for Chapter 11 bankruptcy protection March 27, 2002, for its U.S. operations. The company has 10 production facilities in the United States and Europe, a global distribution network and 5,000 customers worldwide. International operations were not affected by the bankruptcy. The company acquired Huntington-based Inco Alloys International from Inco Ltd. in late 1998. At the time of the acquisition, Inco Alloys was larger than Special Metals. From the date of the acquisition to the filing of the bankruptcy, Special Metals reported only one profitable quarter. The bankruptcy case is being heard in Lexington, Ky. The company is scheduled to present its reorganization plan May 9. That plan could be a reorganization of the company or its sale to a willing buyer. Adkins said many retirees feel betrayed by the company’s likely decision to terminate its pension plan and the possibility that medical benefits could be cut. "All of a sudden, the sickle comes down and they cut the legs from under everybody who can least afford it," he said. He also said he won’t be sad if Special Metals does not survive the bankruptcy and is sold to another company. "Special Metals cannot
survive, and who in the hell wants them to?" he said. Copyright ©
2002 Global Action on Aging
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