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Bankrupt Libbey Glass Moves to Reject Union Contracts, Cut Pay

Bankrupt Libbey Glass Moves to Reject Union Contracts, Cut Pay

Libbey Inc., one of the world’s biggest manufacturers of glass tableware, asked the judge overseeing its bankruptcy to allow the company to reject some collective bargaining agreements and cut worker wages by 10%, according to a court filing Monday.

The company’s latest offer to two of its unions, the United Steelworkers and the International Association of Machinists & Aerospace Workers, also includes freezing its defined benefit pension plan for hourly workers.

The proposed changes provide cost reductions that are essential to a successful reorganization, the company said in a news release Monday.

Libbey expects to emerge from bankruptcy with less than $200 million of funded debt, compared to more than $400 million when it filed for Chapter 11 in June, according to the release. The Covid-19 pandemic intensified a burdensome debt load and strained its access to cash.

Representatives for the Steelworkers and the Machinists labor unions declined to comment.

In bankruptcy, companies can ask to amend labor contracts if management can’t agree with unions on changes to current deals. Companies still have to clear certain legal hurdles before rejecting or altering the contracts and unions can fight the changes in court.

The case is Libbey Glass Inc., 20-11439, U.S. Bankruptcy Court for the District of Delaware.

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