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Officials of Columbus McKinnon Corp. in Amherst, N.Y., were to meet today with representatives of Machinists Local 831, which represents 105 workers currently active at the southwest Cedar Rapids plant.
Machinists Local 831 Business Manager Joe Ironside said he refused to meet with the company until differences on the issue of COBRA payments to workers ages 55 and over are resolved.
COBRA is a 1985 federal law that allowed workers who leave a company to continue to receive coverage under their former employer's health care plan by paying the full premium.
Under the economic stimulus package signed by President Obama in February, the federal government will pay 65 percent of COBRA premiums for employees laid off from Sept. 1, 2008 through Dec. 31, 2009. The subsidy will extend for nine months. Employees are expected to pay the remaining 35 percent.
Ironside said there is a "legitimate difference of opinion" between Local 831 and corporate officials of Columbus McKinnon over COBRA and how the 65-35 payment breakout will work.
Columbus McKinnon officials could not be reached for comment late Wednesday afternoon because the company's offices were closed for the day.
Ironside said the union will file charges with the U.S. Department of Labor if the dispute cannot be resolved.
Midland Forge manufactures hoists and shackles used for rigging loads in the transportation and manufacturing industries.
The Cedar Rapids plant isn't the only facility Columbus McKinnon plans to close as it copes with swooning orders from industrial customers for its hoist and rigging products.
Earlier Wednesday, Columbus McKinnon CEO Timothy Tevens told stock analysts that the recession had provided the opportunity for the company to eliminate 500,000 square feet of manufacturing floor space. He said the company plans to close two facilities in its hoist and rigging operations and downsize a third.
Tevens said the company cut 1 million square feet of manufacturing floor space during the previous recession.
Columbus McKinnon plans to take a one-time restructuring charge of $8-$10 million against earnings to cover costs of the cutbacks, of which most will be incurred in fiscal 2010 just beginning. The amount is roughly equal to the amount Columbus McKinnon expects to save in a year by the cutbacks.
The company reported a net loss of $78.4 million for the fiscal year and a loss of $102.5 million for its fourth quarter. Both periods ended March 31.
Sales for the fourth quarter were down by 15.8 percent versus the same period of fiscal 2008.
Shares of Columbus McKinnon stock fell 6.88 percent, or 96 cents per share Wednesday to close at $13.
n Contact the writer: (319) 398-8317 or david.dewitte@gazcomm.com
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