Glass plant future may hinge on pension

The future of financially struggling Glenshaw Glass Co. may hinge on finding a buyer with pockets deep enough to handle the company's badly underfunded pension fund.

"The big obstacle is money owed from the former owner (John Ghaznavi ) to the pension plan," said James Watt, an international representative with the United Steelworkers of America, one of two unions representing some 300 workers at the 109-year-old glass-bottle plant.

On Tuesday, representatives of the USW and Local 134 of the Glass, Molders, Pottery, Plastics and Allied Workers Union, met with officials of the Meridian Group, which last week was appointed receiver for Glenshaw Glass by Allegheny County Judge Robert Horgos.

As of late yesterday, the unions were negotiating contract terms with Meridian under which the company can continue operations.

"We're willing to talk as long as it takes," Watt said.

Watt said it's a precarious situation, because receiver Meridian can pull the plug and liquidate at any time. On the other hand, he said the company also has the power to secure interim funding to keep the plant going until a buyer is found.

That is what happened at L.E. Smith Glass in Westmoreland County, which on Monday announced it has a buyer, Pittsburgh Annealing Box Co., of McKees Rocks.

Local 134 President Lou Brudnock declined comment yesterday. His union represents the bulk of Glenshaw Glass' work force.

"Ghaznavi took over this plant in 1988 and made a lot of money," Brudnock has said. "But he took a lot of the money he made here and invested in buying other glass plants, building a huge empire, which collapsed in the end, leaving him with the Glenshaw plant and a lot of debt."

Ghaznavi could not be reached for comment yesterday.

There are some potential buyers interested in the plant, but Watt said they might be discouraged by the pension situation.

As reported in October, Ghaznavi filed with the Pension Benefit Guaranty Corp. for a distressed termination of the company's pension plan. The agency is now reviewing the filing, spokesman Gary Pastorius said yesterday.

If the PBGC takes over the pension plan, that could make an acquisition more attractive to a buyer.

Officials of the Meridian Group could not be reached for comment. The company, a turnaround management firm with experience in dealing with troubled companies, issued a statement Friday saying it intended to maintain operations at the plant in the near term while it explored the alternatives available to the company.

The firm was tapped by Glenshaw's largest creditor, PNC Bank, to operate the plant that Ghaznavi has owned for the past 16 years.

Margaret Good, Meridian's president, said in a statement last week that the company hoped that operations can be stabilized quickly.

600450 Glass plant future may hinge on pension
Date: 11 November 2004

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