Dana Corporation reaches groundbreaking labor settlement
Clients Dana Corporation
Jones Day represented Dana Corporation in litigation and arbitrations related to various supply contracts as part of its Chapter 11 reorganization. On July 5, 2007, a groundbreaking labor settlement was tentatively concluded with the UAW and the USW that provided, among other things, for elimination of the Company's retiree benefit obligation (together with the settlement with the Retiree Committee noted above, almost $1.5 billion of accumulated post-retirement benefit obligation was eliminated) and the creation and funding of Voluntary Employee Benefit Association (VEBA) trusts to provide non-pension retiree benefits, a freezing of the current defined benefit pension plans and contributions to a defined-contribution plan, institution of consumer-driven healthcare programs for active unionized employees with sharing of medical inflation costs, a competitive two-tier wage structure, elimination of liability for long-term disability benefits, elimination of cost of living increases, buyouts of high-wage employees, cost-saving changes to work rules and agreement on plant closings, work movement and other manufacturing footprint changes. The labor settlement was premised upon certain understandings related to the capitalization of the Company upon emergence from bankruptcy, which added complexity to the process. On July 26, 2007, the Bankruptcy Court approved the global settlement.
Dana Corporation, Torque-Traction Manufacturing Technologies, Inc., and Dana Heavy Axle Mexico, S.A. de C.V. v. Sypris Technologies, Inc., Sypris Technologies Marion, LLC, and Sypris Technologies Mexico, S. de R.L. de C.V., No. G-06-38H (CPR)