Turner & Newall in $13m pensions cost for parent
UK – Failed UK engineering company Turner & Newall has cost US-based parent company Federal-Mogul $13m (€10m) in extra costs associated with its pension plan
The Michigan automotive products firm has posted a net loss of $48m on sales of $1.6bn, compared to a loss of $20m a year ago.
It was hit by several factors, including pensions and higher raw materials costs. Higher materials made a $21m impact over the prior year period.
It added: “Increased employee costs associated with the company's United Kingdom pension plan of $13m also contributed to the decrease.” The figure is on top of an extra $14m spent on the matter in 2004, according to a filing at the US Securities and Exchange Commission.
The T&N scheme is hundreds of millions of pounds in deficit and become a key element in a takeover bid for Federal-Mogul by US financier Carl Icahn. Last year it failed to agree a deal with creditors and could face collapse leaving large pension liabilities.
Analysts have warned it could swamp the UK’s new Pension Protection Fund.
Federal-Mogul named Jose Maria Alapont chief executive earlier this year and he is now “actively engaged in assessing the challenges facing the company on business strategy, technological innovation, customer satisfaction and global profitable growth”.