|By Rick Seltzer, Herald-Times, Bloomington, Ind.|
|McClatchy-Tribune Information Services|
What's going to happen with its union workers?
Unfortunately, there's not much of an answer available right now. Both company leaders and labor leaders said it's not clear how union employees will be affected.
"I have no idea," said
The company filed federally required mass-layoff notices for employees at its
They also said a new buyer is prepared to scoop up the firm's assets and start a new corporation. A company called Indiana Commercial Finance, which owns
That raises the question of whether the new buyer will use the sale as a chance to shed union contracts. Such a move isn't unheard of, according to
"It's more common to use the threat of bankruptcy as a way of getting concessions," he said. "But it has been done where you make the company more attractive by trying to get rid of the unions through bankruptcy."
Varga has some history with
This week, though, Varga made it clear he doesn't have any inside information on the situation between
"Reducing labor costs is one way of making the company more attractive," he said. "I'm not saying that's what they're doing here."
Weekly pay for union employees amounted to slightly more than a third of the wages
A cost comparison between union and nonunion labor isn't that simple, however. Hours worked could be swaying average weekly wages. Wages also don't reflect other benefits such as vacation time, personal time, health insurance and retirement plans.
Costs are only one part of the equation when it comes to labor. There's also skill and training, which Varga argued are particularly important in hazardous lines of work.
"People who work on railroads, they're highly unionized because it's very dangerous work," he said. "I know from talking to guys in the quarries, if you're working with someone who's not trained, you're endangering yourself."
How exactly this all works out could depend on what happens in the bankruptcy and sale processes. If the reorganization is done through an asset sale, a buyer would not have to assume collective bargaining agreements, according to
Things will be different if the new owner keeps the company as a "going concern" with the same workforce, he said.
"Then they are obligated to deal with the same union," he said. "Under bankruptcy, they have the option to negotiate changes to the collective bargaining agreement."
(c)2014 the Herald-Times (Bloomington, Ind.)
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