Unbroken after a four-year strike, workers from Colt's firearms division are rejoicing that the state has joined in a buyout that ends the strike and gives workers $13 million in back pay.
State Treasurer Francisco L. Borges announced the terms of the buyout to investors and union officials. The state joined with striking workers, Colt managers and private investors to buy the firearms division, which had been up for sale for 11 months.Borges said the state would contribute $25 million from pension funds and would own about 47 percent of the new company, which will be called Colt's Manufacturing Co.
"Let me emphasize that this is a carefully thought out, carefully structured, potentially very profitable business venture," Borges said. "The state's participation is not a bailout, not a handout, and not a subsidy."
The new company's first official act was to write out a check for $10 million in back pay to the 1,050 workers who struck Jan. 24, 1986. About 50 striking workers broke out in applause when the company produced the check at a news conference in Borges' office.
Under the terms of the buyout, striking workers will be put back to work based on seniority and will receive a total of $13 million in back pay, a 13 percent wage increase and a stock ownership plan that will allow United Auto Workers members to own 11.5 percent of the company.
In return for the $13 million in back pay, the United Auto Workers dropped its lawsuit against Colt Industries for unfair labor practices.