Pittsburgh Brewing's Woes Mount
July 15, 2005 - Pittsburgh Brewing, best known for producing Iron City beer, warns that it needs help with a pension plan covering about 530 current and former employees. However, vice chairman Joseph Piccirilli denied the company is in danger of going out of business.
He said his main goal is to protect jobs by investing in the brewery's future, adding that sales of IC Light are up and the company received worldwide attention when it introduced its new aluminum bottles.
The company told the federal Pension Benefit Guaranty Corp. it has lost $1.2 million from operations over the last three years despite $1 million in cost reductions and concessions from lenders and government agencies.
If the Pension Benefit Guarantee Corporation were to pick up the tab for 530 current and former employees, the brewery could make needed improvements. Those improvements include replacing a 45-year-old kegging system, as well as a 65-year-old boiler that is used to power the company's production line.
The brewer, which began brewing Iron City beer 140 years ago, hasn't made nearly $900,000 in required contributions to the pension plan since October. The plan has a deficit of more than $5.6 million.
The pension plan in question covers salaried and hourly workers and pays about $1.6 million in benefits annually. Benefits were frozen when two plans were merged in 1995. Currently, the plan has enough money to pay about 70 cents for each $1 of benefits owed workers.
The brewery produced 372,000 barrels of beer in 2004, down from 450,000 in 2001.