Auto Part Maker to Appeal Court Order Blocking Benefit Reduction

December 28, 2005 ( - ArvinMeritor, a maker of vehicle exhaust systems, has said it will appeal a federal court order that blocks a January 1 reduction in the company's retiree health care benefits.

Bloomberg reports that the company said in August 2004 that as of 2006 it would scrap health care benefits that supplement federal Medicare coverage for retirees 65 or older.The company has been cutting costs after posting net losses in three of its last five quarters.

The Troy, Michigan-based company, disclosed the court decision and its intention to appeal in a regulatory filing with the Securities and Exchange Commission. According to Bloomberg, the filing did not give details of the planned changes.

The ruling was issued by the US District Court for the Eastern District of Michigan in response to a challenge by the United Automobile Workers (UAW). The company said the federal court also told it to reinstate health benefits for UAW retirees to levels before cuts made this year and in 2003.

Three class-action lawsuits have been filed against the company’s changes in retiree benefits, claiming that the revisions violate terms of agreements with the UAW and the United Steel Workers union at plants that have been closed or sold, ArvinMeritor said.