ALLENTOWN, PA. -- Mack Trucks workers will be protected for at least two years if Renault Vehicules Industriels succeeds in its takeover bid, union leaders said.
Kim Blake, president of United Auto Workers Local 677, said a successor clause in the union's contract requires future owners to honor the existing wage agreement. He said the contract would remain in effect through the October 1992 expiration date, even if the company is sold.
Mack, the country's fourth-largest truck maker, is based in Allentown and has 7,550 employees.
Speculation about the future of Mack arose Friday when RVI, which owns 44.6 percent of Mack stock, said it wants to buy all remaining shares at $6 dollars a share.
RVI, a subsidiary of French automaker Renault, said it would spend $98 million for the Mack stock.
RVI said it was making the offer because of Mack's worsening financial condition and a need to restructure the truck manufacturer's debt.
Mack lost a record $185.4 million in 1989 and $33.9 million in the first quarter of this year. The company projects a net loss of about $130 million for 1990.
The company obtained a two-week extension and is seeking a long-term extension of payments on a $350 million loan with Chemical Bank that were due this past weekend.
Mack officials said the company would probably default on its $148 million revolving bank loan with Citibank of New York and Credit Lyonnais of France after its second-quarter results are calculated.
Renault said it would make its offer on Thursday. The offer, which would expire Aug. 9, would be conditioned upon enough shares being tendered to boost its interest in Mack Trucks to at least 90 percent.
Mack spokesman James Santanasto said the company appointed a special commission to evaluate the offer.
The UAW International office in Detroit is keeping close watch on Mack's financial situation, Blake said.
"It wouldn't break our hearts if RVI was successful in its bid," he said. "They have an interest in Mack and, naturally, would like to get some of their money back."
Analysts said RVI's move, if successful, could result in Mack being merged with A.B. Volvo or another Renault-affiliated operation.
In February, Volvo agreed to buy 45 percent of Renault's truck operations.
Volvo GM Heavy Truck Corp., a joint effort between the Swedish company and General Motors, needs additional heavy-duty truck manufacturing capacity and may be interested in Mack's Winnsboro, S.C., plant, analysts said.
Volvo GM has its headquarters in Greensboro, N.C.