The PBGC reached a preliminary agreement with Hayes Wheels International Inc. and MWC Holdings Inc. that will require the soon-to-be-merged companies to add at least $54 million in cash to underfunded pension plans.
In exchange, the PBGC agreed not to terminate the plans.
Hayes, of Romulus, Mich., and MWC Holdings, parent of Motor Wheel Corp. of Okemos, Mich., will have to add $14 million in pension contributions, when the merger closes, which is expected next week. An additional $28 million will go into the Hayes plans and $12 million into the Motor Wheel plans over three years. After that, $6 million annually will be contributed to the Motor Wheel plans until they are well-funded. As a result of the agreement, Hayes' plans will be almost fully funded by the end of three years and Motor Wheel's plans will be almost 70% funded. Currently, Hayes has an unfunded liability of about $37 million; Motor Wheel, about $42 million.