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FORT WAYNE, Ind. -- Tokheim Corp., one of the world's largest manufacturers of gasoline pumps, notified employees that they would lose their insurance benefits by mid-December.
The financially ailing company, which has been in and out of bankruptcy in recent years and was told earlier this year that it could shut down by year's end, is actively courting suitors as it runs out of cash.
In a memo to workers, Tokheim management said medical, dental and vision insurance plans for all U.S-based employees would cease Dec. 15, the Associated Press reported. The company staffs 500 workers at its Fort Wayne headquarters.
"Management and the board of directors, as required, have recognized that difficult decisions have to be made to ensure that the sale process is successfully concluded," the memo said. The company had already halted employee contributions to the 401(k) savings plans and will not pay severance to workers terminated through layoffs.
Joe Caccamo, head of the United Auto Workers Local 1539, said stoppage of insurance benefits and termination of severance pay violate the labor agreement, the AP reported. "For years I've heard from the company that their most important assets are their people. Well, they just proved to us just how important we are."
Tokheim's former CFO, John Negovetich, recently said the company would most likely sell its money-making foreign operations and its Gasboy subsidiary in Lansdale, Pa. The remaining assets are likely to be liquidated, the AP reported.
Like other major equipment manufacturers, Tokheim has been crippled by a sluggish economy coupled with significant consolidation among the major oil companies. Its two chief rivals, Gilbarco and Dresser-Wayne, have been sold in the past two years.
Additionally, many industry observers cite Tokheim's 1998 acquisition of Schlumberger Ktd.'s Retail Petroleum Systems for $330 million as a major debacle. While it made Tokheim the largest producer of petroleum dispensing devices, critics say the company grossly overpaid and has been unable to offset the initial outlay.
Tokheim's net loss more than doubled to $38.3 million in its third quarter this year and more losses were anticipated by year's end.