FreightCar America reaches $32.8 million settlement with union
Chicago-based FreightCar America Inc. has agreed to pay $32.8 million to settle a lawsuit over the termination of retiree medical coverage and life insurance benefits.
The company, which has operations in Roanoke, makes, leases and repairs railroad freight cars.
The company said Friday that it has reached a preliminary agreement to settle a lawsuit filed by the United Steelworkers International Union and other plaintiffs. The deal is subject to court approval, which is expected to take place in early 2016.
“We are pleased to have reached this preliminary settlement, which will allow us to put this matter behind us and keep us focused on the continued execution of our strategic priorities, including railcar diversification and further productivity improvements across the organization,” Joe McNeely, the company’s president and CEO, said in a statement.
The steelworkers union said the lawsuit was scheduled to go to trial next week in Johnstown, Pa. The union said that the company will contribute more than $31 million to a fund to provide ongoing contributions toward insurance benefits. The settlement is expected to affect 650 retirees.
After the settlement, FreightCar America expects to realize an after-tax gain of approximately $11 million, based on associated recorded liabilities of approximately $67 million on June 30.
In addition to Chicago and Roanoke, the company has facilities in Alabama, Illinois, Nebraska and Pennsylvania.