Troubles possible for Remington plant in Lonoke
Associated Press
Thu, Sep. 08, 2005
LONOKE, Ark. - North Carolina-based Remington Arms Co.'s chief executive has sent a letter to the company's 1,000 Lonoke employees saying the company's long-term survival could be in jeopardy because of pension plan problems.
"Our company is facing one of its biggest financial challenges of the past 25 years," chief executive Thomas Millner wrote in a copy of the letter obtained by the Arkansas Democrat-Gazette newspaper of Little Rock.
Millner said the pension plan is receiving low interest rates and returns on its investments. He said the company is meeting its legal obligations regarding the plan. The Remington Arms pension plan covers all non-union employees hired before June 1996 and all union employees hired before September 1997.
The rifle and shotgun company's pension plans had assets of $109.6 million at the end of 2004, according to its annual report filed with the Securities and Exchange Commission. By the end of that year the company had accumulated benefit obligations of $138.9 million, which benefit plan experts say indicates a shortfall of at least $29.3 million.
Charles Rink, manager of the Lonoke plant, said he has heard the shortfall could be more than $48 million. Millner said in his letter that the plan's multi-million dollar future liability could be beyond the company's ability to fund from its earnings.
Remington Arms had a net loss of $3.2 million in 2003 and $4 million last year after combined earnings of more than $53 million the three previous years. It's debt has grown from $157 million in 2000 to $203 million last year.
"The funding requirements of the pension plan have the long-term potential of affecting our survival," Rink said. "That's why we're looking at trying to be proactive and examining all alternatives to help protect what our employees have."
The Madison, N.C.-based company employs 2,400 people nationwide.
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