TOLEDO, Ohio (AP) - Bankrupt auto parts maker Dana Corp. said Friday it reached settlement agreements with the United Steel Workers and United Auto Workers unions that will slash the company's long-term healthcare and benefit costs.
Dana also said it struck a deal with Centerbridge Capital Partners for an investment of $500 million in Dana preferred convertible stock, as well as Centerbridge's help in finding investors for another $250 million in convertible preferred shares.
Dana said the deal with the unions includes replacing the company's health care and long-term disability obligations to their members with voluntary trusts, to which it will contribute $700 million cash and about $80 million in stock.
The union deals also include a four-year extension of collective bargaining agreements and a two-tier salary scale at certain operations.
The deal is the latest move by a bankrupt manufacturer in the embattled auto-parts sector to cut wage and benefit costs as a way to restructure and streamline future operations.