Pension Benefit Guaranty Corp. is suing Bendix Commercial Vehicle Systems for $16.6 million over what the agency says is the company’s unwillingness to cover pension debt from 63 displaced workers at its Frankfort, Ky.-based plant, confirmed PBGC spokesman Marc Hopkins.
Federal law requires companies to provide financial protection to employees’ pension plans when more than 20% of workers participating in a company plan lose their jobs in a shutdown, according to a PBGC news release. The Frankfort plant was closed Dec. 31, 2007.
“Bendix continues to ignore its legal responsibility to these workers,” PBGC Director Joshua Gotbaum said in the release. “We’ve tried to work with them in good faith, but now we have no choice except to take them to court. Make no mistake: PGBC will use every legal means to protect pensions.”
Barbara Gould, a Bendix spokeswoman, said the company disagrees with the PBGC’s news release and that Bendix will issue a response early next week.
“Bendix is fully committed to its current workforce as well as its former employees and retirees,” the e-mailed response from Ms. Gould said. “We remain a strong, stable company with a consistent and clearly demonstrated commitment to our pension obligations.”
The lawsuit was filed in U.S. District Court in Cleveland.