July 12, 2006

Statement on Joy Global Retirement Funds Settlement

Joy Global has reached a $10.8 million settlement in a class action lawsuit on behalf of employees of the company formerly known as Harnischfeger. The group includes salaried employees of the former Beloit Corporation.

The lawsuit claimed that the company allowed employee 401(k) assets to be invested in Harnischfeger stock when it was a risky retirement investment. The lawsuit was brought by one Harnischfeger employee, and all other salaried employees were made parties to the lawsuit unless they opted out.

Senator Judy Robson (D-Beloit) issued the following statement:

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“The lawsuit over the risky investments shows that Harnischfeger was not looking out for the best interests of its employees when it was sinking into bankruptcy. This was an Enron-like disaster in which the interests of the employees were put last. Harnischfeger stock was sinking fast, and so were the employees’ nest eggs. Instead of protecting the employees’ retirement savings, the company allowed them to dwindle down to practically nothing. The settlement will come nowhere near making the employees whole for their retirement fund losses. But it is more than they will get had the employees not filed a lawsuit.

“I hope that Joy Global’s willingness to settle this lawsuit bodes well for the pending severance pay lawsuit brought by the Wisconsin Department of Justice. It’s time that the company admit that it did wrong by its employees. It certainly has plenty of money to give them what they are owed. According to the company’s own reports, its net income more than doubled last quarter, to $82.9 million, up from $38 million a year ago.

“The Wisconsin Department of Justice continues to work diligently on behalf of Beloit Corporation workers. I’m proud of the strong ethic we have in Wisconsin for protection of workers, consumers and families.”

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The lawsuit is separate from a $10 million breach-of-contract lawsuit brought by the Wisconsin Department of Justice against Joy Global. That lawsuit alleges the Harnischfeger broke a promise to salaried employees when it unilaterally and drastically reduced severance packages for about 300 Beloit Corporation employees. The severance package originally called for six months worth of salary, but the company reduced that to 60 days of pay after it declared bankruptcy in June of 1999.

The breach-of-contract lawsuit is awaiting a ruling by a judge as to whether the federal Employee Retirement Income Security Act (ERISA) applied to the Beloit Corporation severance packages. The Wisconsin Department of Justice is arguing it did not apply, and that standard contract law applies.

In March 2004, the Beloit Corporation liquidating trust paid those same Beloit Corporation employees $490,000 for owed severance pay as part of a settlement in bankruptcy court.