Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • ITEC
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • International Elastomer Show
    • Women in Tire & Rubber
    • HEXPOL Sponsored Content
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Smithers webinars focus on performance materials in green tires
      Ford to close 3 plants, end production in Brazil, costing $4.1 billion
      Study: Vehicle buyers cling to familiarity amid pandemic
      Kumho launches commercial LT, performance tire lines
    • Smithers webinars focus on performance materials in green tires
      Ferentino Tyre opens Sri Lanka plant; eyes exports to U.S., Europe
      Kumho launches commercial LT, performance tire lines
      Taiwan tire makers propose settlement of import duties case
    • JobsOhio funding gives Sperry & Rice room to grow
      TRAC's Glenn Maidment caps 51-year rubber industry career
      LafargeHolcim looks to solidify U.S. presence with Firestone Building Products purchase
      Hankook Tire holding company adopts Hankook & Co. identity
    • Smithers webinars focus on performance materials in green tires
      Endurica earns prestigious Tibbetts Award from SBA
      Kuraray to raise elastomer prices again
      Synthomer optimistic, raises earnings forecast
    • Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
      IRP Medical solidifies portfolio with KDL deal
      Rubber lab services firm Ace reports record year
    • ASTM cancels April meetings as COVID-19 continues impact
      Paycheck Protection Program funding reopens Jan. 15
      Detroit Auto Show canceled; alternative event being planned for September
      Top Glove reopens COVID-hit factories with enhanced precautions
    • Jack Murphy joins Akron Dispersions
      Adriano Alfani named Versalis CEO
      Maroon Group adds to Southeast sales team
      ASTM taps rubber executive as new board member
    • Paycheck Protection Program funding reopens Jan. 15
      Taiwan tire makers propose settlement of import duties case
      Lobbying group unveils policy agenda to speed transition to EVs
      NADA, bank group to assess political contributions after U.S. Capitol siege
    • Column: Pandemic looms over everything in life, business in 2020
      Column: Lessons from the 2020 Best Places to Work
      Editorial: Silicone hit hard by pandemic, expected to bounce back
      Column: Still far way from normal
    • Effects of multiple repurposed materials for reinforcements of standard rubber compounds
      Impact of peroxide blends on the cure rate and aged properties in HNBR
      Techniques to detect long chain branching in polymers
      A comparative study looking at effects of curing kinetics and batch variation on SBR injection molding and numerical analytics
    • WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
      IEC speaker: Specialized elastomers may reduce spread of life-threatening pathogens
      Rubber Division seeking abstracts for Spring Technical Meeting
    • WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
      Rubber Division planning second Women of Rubber event
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: MonTech introduces 1,500 kN lab press
      New products: 3M introduces new durable, pliable medical adhesive
      New Products: Lanxess launches energy-efficient PU elastomer
      New Products: MonTech automates bale cutter for safety, productivity
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Smithers webinars focus on performance materials in green tires
      Ford to close 3 plants, end production in Brazil, costing $4.1 billion
      Study: Vehicle buyers cling to familiarity amid pandemic
      Kumho launches commercial LT, performance tire lines
    • Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
      IRP Medical solidifies portfolio with KDL deal
      Rubber lab services firm Ace reports record year
    • Jack Murphy joins Akron Dispersions
      Synthomer optimistic, raises earnings forecast
      Top Glove reopens COVID-hit factories with enhanced precautions
      Malaysia electronics group to enter rubber gloves sector
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Select™: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
      Sponsored By HEXPOL Compounding
      Understanding and Selecting Performance Additives for Rubber Compounding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2020 International Silicone Conference Virtual Edition
      2020 ITEC Virtual Edition
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
June 23, 2006 02:00 AM

Bandag plans to reduce staff by 15 percent, freeze pensions

Vera Linsalata
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    MUSCATINE, Iowa-Bandag Inc. is trying to cut is work force and operational costs by offering early retirement and voluntary separations to eligible employees and changing its pension plan.

    The retread materials and systems provider wants to slice 175 salaried employees off its roster, equal to 15 percent of its staff. The company said if it doesn´t get enough volunteers, it will make cuts unilaterally.

    Bandag said it also:

    —is freezing its defined benefit pension plans, and modifying the defined contribution program;

    —has closed its pension plans for salaried and hourly workers in the U.S. and Canada; and

    —will freeze the existing pension plans for all employees in the U.S. and for salaried Canadian workers.

    The company said the defined contribution program-basically a 401(k), in which the employee makes a contribution that is matched by the company up to a certain amount-is better designed to encourage workers to save for retirement. In the defined benefit plan, Bandag is responsible for contributing and investing employees´ retirement dollars.

    Bandag said the pension freeze will allow it to control retirement benefit expenses better while at the same time preserving workers´ retirement benefits to date.

    Overall, the company estimates it will record a net curtailment pretax gain of $1.9 million in the second quarter through the pension plan change.

    Warren Heidbreder, Bandag´s chief financial officer, said its former approach to providing benefits to retirees has "outlived its usefulness" and hence, it is freezing pensions in favor of its 401(k) plan. All Bandag employees already participate in a 401(k)-contribution plan.

    "Our pension costs, as with what many companies are finding, are escalating very rapidly," Heidbreder said. "It´s also a very volatile expense. It´s a legacy cost that builds over time."

    In the past five years, Heidbreder estimated Bandag´s pension costs have risen $10 million or $11 million. Volatile markets have meant the company´s assets have experienced large swings in returns.

    At the same time, raw material prices and higher energy costs have taken their toll on Bandag. In 2005, the company´s net earnings fell 26 percent on sales of $914.6 million. Some raw materials prices jumped by as much as 200 percent, according to Heidbreder. Price increases helped Bandag´s sales, but he noted there is "a reasonable limit" to price increases when the company´s customers also are getting squeezed.

    Bandag reported a net loss for the first quarter of 2006 of $12.6 million, with earnings from continuing operations falling 36.7 percent.

    Chairman and CEO Martin Carver said the North American markets for commercial replacement tires have changed during the past several years, a situation exacerbated by record-high raw material prices and intensified competition. He said the steps the company is taking are intended to stimulate growth in Bandag´s traditional retread business.

    To that end, Bandag is offering early retirement to about 170 employees who will have reached age 55 by Dec. 31 and voluntary separation to other U.S. salaried employees. If voluntary separation and early retirement result in fewer than 175 salaried employee acceptances of its U.S. work force, Bandag said it will terminate employees to achieve that 15-percent reduction by mid-September.

    No salaried employees in Canada will be cut because Bandag in April announced it was phasing out tread rubber production at its facility in Shawinigan, Quebec, which will be completed by the end of this month. Fifty-one employees will lose their jobs from the plant closure. Heidbreder said the number of salaried Canadian employees remaining is insignificant compared with the U.S.

    Employees who accept the early retirement offer will have five years added to their age in determining their pension benefit and will be able to purchase medical coverage through the company until age 65.

    Pretax expenses associated with early retirement and voluntary and involuntary separation programs are estimated to be $12 million to $17 million, which is expected to be recorded in the third quarter. Bandag estimates pretax cost savings from reducing its work force will be $5 million to $7 million for 2006 and that it will achieve an annualized net pretax savings of $16 million to $20 million.

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • ITEC
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • International Elastomer Show
      • Women in Tire & Rubber
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION