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Published: Saturday, 8/4/2007

Continental Tire to pay health benefits

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

Four months after a German tire maker reduced health benefits for retirees in Bryan, their lawyers will confer with a federal judge in Toledo Monday about how to compensate them for their losses.

That meeting follows a decision this week by Judge Jack Zouhary of U.S. District Court in Toledo, who ruled that Continental Tire North America Inc. improperly reduced the benefits of 3,000 retirees and their spouses from plants in Bryan, Akron, Mayfield, Ky., Charlotte, N.C., Waco, Texas, and City of Industry, Calif.

This is a total victory, said Stephen Pincus, a Pittsburgh lawyer who represents the retirees and the United Steelworkers in the lawsuit filed late last year.

Continental Tire has vowed to appeal to the U.S. Court of Appeals in Cincinnati. Judge Zouhary ruled against the company this week in response to motions from each side asking that the other s claims be dismissed before trial.

A company spokesman couldn t be reached for comment.

Retiree health care has been a hot national issue, and many companies in bankruptcy have terminated such benefits under a different set of federal rules, such as at Toledo s Dana Corp. In other instances, companies negotiate with their unions to reduce benefits to cut costs.

Judge Zouhary has scheduled a telephone conference with lawyers for Monday. Mr. Pincus said he will ask that the previous insurance program be restored, that retirees receive refunds for premium payments above what they paid before the changes, and that they receive other compensation.

Under changes implemented in April, couples who weren t old enough to qualify for Medicare had to pay $1,000 a month for insurance, the lawyer said.

Unable to afford that, many retirees dropped the coverage, the lawyer said.

Several of the plants, including Bryan, were sold or closed by Continental Tire in recent years.

Judge Zouhary s decision said the company was unable to come to an agreement with the union during contract talks, so it began implementing the cuts without consent.

The company argued that it had the right to reduce retiree benefits because labor contracts had expired.

The judge said that retiree benefits must be treated differently from wages and benefits of active employees because there is an inference in labor agreements that those benefits ... continue as long as the beneficiary remains a retiree.

Contact Gary Pakulski at:gpakulski@theblade.comor 419-724-6082.



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