Members of the United Steelworkers union representing Briggs & Stratton workers in the Milwaukee area approved a new contract with KPS Capital Partners, the potential buyer of the Wauwatosa-based small engine maker that is currently in bankruptcy court.
USW Local 2-232 workers had not had a contract since mid-2017 when their last deal expired. Talks between the company and union had not progressed since mid-2018.
The deal with KPS, a New York-based private equity firm that touts its efforts to work with unions, includes 11% wage increases over the course of the five-year deal. It also maintains existing health care coverage, a retirement plan and increased sick and accident coverage.
The union currently represents around 300 hourly workers at Briggs, down from around 500 recently. The company announced in June it planned to lay off around 184 union employees as it moves production of certain product lines to facilities in New York State.
In a notice to state officials, Briggs said its bankruptcy process had pushed back the date of when its production of the products would stop in Wauwatosa from Aug. 28 to Sept. 25.
The bankruptcy process kicked off in mid-July with the company’s Chapter 11 filing. KPS agreed to acquire nearly all of Briggs’ assets for $550 million as part of a court-supervised sale process. The firm is also providing $267 million as part of a larger financing package to allow Briggs to continue operating while it works through the bankruptcy process.
As part of that deal, KPS reached an agreement in principle with the union, which workers approved over the weekend.
"The USW supports the KPS bid, and we look forward to a long and productive partnership with the company here," said Michael Bolton, director of the USW's District 2, which covers Wisconsin and Michigan. "The company has a solid track record of success in running manufacturing facilities like this, and this contract will put the company and the workers on that same track."
The new contract also includes union-friendly provisions such as dues check-off, new employee orientation and neutrality on union organizing at other facilities. It would also allow for the establishment of a voluntary employees’ beneficiary association to fund retiree health care coverage.
As part of its bankruptcy process, Briggs terminated health and life insurance benefits for retirees. Those benefits cover around 450 retirees, including 250 union retirees, for health insurance.
The union objected to a Briggs motion related to terminating the benefits, but was able to reach an agreement with the company. The deal extended coverage for an additional month and gave the USW retirees an allowed general unsecured claim for nearly $22.5 million in the bankruptcy case.