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Pittsburgh Brewing accord reached

Joe Napsha
| Sunday, Jan. 14, 2007

After almost two weeks of negotiations, Pittsburgh Brewing Co.'s prospective new owner has reached a tentative contract that union and company officials said Saturday will play a key role in saving the bankrupt business.

Pittsburgh Brewing Acquisition LLC, which has proposed buying the maker of Iron City beer when it emerges from bankruptcy, reached the tentative accord on Friday with the International Union of Electrical Workers-Communications Workers of America Locals 22B and 144B.

The company is expected to submit a reorganization plan Tuesday to federal bankruptcy court. Lowering labor costs is a key element in the reorganization and sale of the company.

The two unions, which represent about 160 bottlers, brewers, mechanics and delivery drivers at the Lawrenceville brewery, are scheduled to vote on the agreement Jan. 21, said George Sharkey, a union business agent and president of the unions' joint negotiating board.

"We certainly view this as a major step forward" in saving the brewery, Sharkey said yesterday.

Representatives of each side declined to reveal details of the tentative agreement, which would replace the five-year contract that took effect in May 2005.

"The success of reaching an agreement is a major milestone and another positive step toward emerging from bankruptcy," said Timothy Hickman, of East Liverpool, Ohio, a spokesman for Pittsburgh Brewing Acquisition and a company negotiator.

The two sides reached an agreement "because everyone around the bargaining table was focused on keeping the brewery viable," said Hickman, one of the prospective investors in the brewery.

The unions' 10-member negotiating committee agreed unanimously to recommend approval of the tentative contract, Sharkey said. If workers approve the proposal, the contract would take effect only if, and when, Pittsburgh Brewing Acquisition, led by Connecticut investor John N. Milne, buys the brewery, Sharkey said.

"In consideration of the unusual circumstances of bankruptcy and the opportunity to save jobs at the brewery, we have an agreement that will allow us to move forward and for the brewery to remain a Pittsburgh icon," Ken Ream, an international union representative for the IUE-CWA, said.

Milne described it as fair to employees and the company. He said it preserves jobs, gives workers the wages and benefits they need and will give the 145-year-old brewery an opportunity "to grow into a very successful business."

In July, the brewery's owners asked workers to accept a 10 percent wage cut, an increase in their contribution to health insurance premiums and a reduction in vacation for senior workers.

The workers refused.

Sharkey declined to comment on whether the concessions sought by Milne were greater than those Pittsburgh Brewing had asked union workers to accept last summer.

For the sale of the brewery to go through to Milne, the union must agree to the new contract.

The company, which in December 2005 sought protection from its creditors by filing for bankruptcy, hopes to get approval of its reorganization plan and emerge from the court supervision next month.

Milne, a private equity fund manager from Westport, Conn., has said he hopes to buy the business in March. He has said his team, as yet unidentified, would invest more than $7 million in the brewery. That investment includes paying off creditors.

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