COLLECTIVE BARGAINING

Vol. 8, No. 2
April, 1999



	COLLECTIVE BARGAINING Tough Bargaining Ahead on Outsourcing, Health Costs and Demand for Higher Pay Union and employer negotiators will confront a series of bread-and-butter issues that may be more difficult to settle than two or three years ago when they faced each other across the bargaining table. Employers know what they want: to cut labor costs by outsourcing some of their operations to companies with a low-wage work force; by compelling employees to pay a greater share of rising health costs; by forcing unions to agree to changes in work rules that would increase productivity and by instituting layoffs. Companies say they need union concessions so they can remain competitive in domestic and global markets. They feel they are at a serious disadvantage in competing with non-union rivals, and they ask for concessions in the interests of both their employees and themselves. Because of a tight labor market and a booming economy, unions also have a set of demands for which they will argue more aggressively than in former years. Many unions feel that their members are entitled to substantial wage increases and benefits because they made concessions to employers when times were tough. They will be insisting that wage increases be tacked onto their base hourly rate, rather than treated as lump-sum payments and bonuses that leave the base rate unchanged. Job security is still the top demand with most unions that are preparing for contract talks. Hundreds of thousands of good-paying jobs have been lost in the past two years through corporate downsizing and plant closings. A particular cause for union concern is the growing trend of companies to send part of their production operations, which are normally done by in-house employees, to non-union subcontractors with a low-wage work force. Subcontracting and the threat of plant closings were key issues in the eight-week General Motors strike by the United Auto Workers that shut down virtually every GM plant in North America. Not only the auto workers, but steelworkers, Teamsters, machinists and others will be seeking restrictions on outsourcing in negotiations totaling hundreds of thousands of workers. A Battle Over Health-Care Costs There was a time when employers assumed the full cost of health care, but for most workers, even those protected by unions, that is no longer true. With the cost of health insurance rising from 6 percent to 20 percent and in some cases even higher, employers are insisting on shifting some of the added costs of higher premiums to their employees. Over the years, union members have seen increases in the amount of deductibles, co-payments and the cost of prescription drugs. Unions will strongly oppose shifting the burden of rising health-care costs to their members, but will take a cooperative stance toward constructive measures to control costs. They may also seek changes to improve the quality of medical services their members are receiving. Most employers and unions will seek three-year contracts, but a trend has been developing for four-year contracts and even longer. In good times, unions generally favor longer contracts because they assure stability. Big-Time Contract Renewals The United Auto Workers faces some tough bargaining with the "Big Three" automakers — General Motors, Ford and Daimler-Chrysler — when their contracts expire on September 14. The UAW will be negotiating for the 400,000 workers employed by the big three companies. Since the last three-year contract, the industry has undergone dramatic changes which are bound to influence the give- and-take bargaining. There are the big mergers of Chrysler with Daimler-Benz and Ford with Volvo; new plants to be opened and others closed, and changes in the top management of the three companies. The United Steelworkers of America (USA) will be negotiating with domestic steel manufacturers to renew a contract that expires in late July. Approximately 75,000 workers will be affected by the outcome. Negotiations will be complicated because the union and domestic steel manufacturers have joined forces in a campaign to reverse the sharp decline of U.S. steel production caused by heavy imports from Japan and South Korea. Layoffs have taken place in many of the big steel mills, making job security a prime item at the bargaining table. The International Association of Machinists and Aerospace Workers is preparing its negotiating strategy as it gets ready to meet with the "Big Three" aerospace cornpanies — Boeing, Lockheed Martin and Raytheon — which account for nearly 70 percent of the industry's sales. The union will be bargaining for 71,000 members. One sticky problem for the union will be Boeing's announced plan to lay off 48,000 workers in the next two years. Several important negotiations will be taking place in the airline industry. The Flight Attendants, representing 20,000 members, will be seeking a contract renewal with American Airlines. The union is hoping to avoid the stormy 1993 bargaining which led to a five-day strike settled by binding arbitration. The negotiations between the United Airlines and the Air Line Pilots Association (ALPA), with 9,600 members, are unusual because United is an employee-owned airline. A major Teamsters contract that will be up for renewal covers 12,000 union drivers who transport cars from factories to dealer showrooms. James P. Hoffa, the new IBT president, will lead the union's negotiating team. In the railroad industry, the national freight agreement covering 100,000 employees will be up for renewal at the end of the year. The United Transportation Union and the Brotherhood of Locomotive Engineers, which have agreed to merge, will bargain jointly for their members. The last contract was signed in October 1996. The signatories were 35 major railroads and 12 unions. Machinists OK Pact for 6,150 A strike was averted when the International Association of Machinists (IAM) negotiated a three-year contract with the Lockheed Martin Corp. for 6,150 workers at its two facilities in Marietta, Ga. and Palmdale, Cal. The agreements, which were ratified by the workers at both plants, call for a 3 percent increase and a lump-sum payment of $600 each year. A company plan to shift some employees to a 10-hour, 4-day week, which the workers had previously rejected, was not included in the final contracts, although the subject will be discussed by a joint committee. The company also agreed to a 17.5 percent increase in retirement benefits — from $40 to $47 for each year of service, and raised the basic life insurance to $23,000. 3% Deferred Pay Increases in 1999-2000 Workers covered by multi-year contracts will receive an average 3 percent increase for 1999 and possibly the same for the following year, according to a Bureau of National Affairs study of 1,428 collective bargaining agreements. The printing industry led all others with an average wage increase for 1999 of 7.2 percent in current contracts. Next in line was construction with a 4 percent pay raise. Industries with the poorest record of deferred pay raises for this year were the rubber industry (1.1 percent) and insurance-finance (0.5 percent). 2,500 NBC Staffers Ratify 3-Year Pact By an overwhelming 80 percent vote, 2,500 technicians at the National Broadcasting Co. ratified a three-year agreement that provides wage increases of 3 percent a year, an additional paid holiday (Martin Luther King's birthday) and improved contract language. The agreement was negotiated by the National Association of Broadcast Employees and Technicians (NABET), an affiliate of the Communications Workers of America. It covers camera operators, writers, producers, editors and technical staff employed at NBC facilities in New York, Chicago, Los Angeles and Washington. In a high-pressure industry where employees must be shifted around quickly to accommodate new situations and revised schedules, there were some improvements for employees in regard to penalty payments for call-ins on days off and for cancellation of events. NBC was able to get an increase in its "daily hires," from 35 percent to 50 percent, in addition to contract changes that give it greater flexibility in its operations. Flight Attendants Win at America West After waiting more than four years to gain their first contract from America West Airlines, the Association of Flight Attendants finally achieved their goal a few minutes past a union-imposed, March 20 deadline. The five-year agreement affects 2,400 employees. The final negotiations came after a 30-day cooling-off period ordered last month by the National Mediation Board under the Railway Labor Act, after the union had rejected an offer of binding arbitration and was prepared to take its own brand of strike action. Had no settlement been reached, AFA would have engaged in "guerrilla warfare" against the airline by activating a plan it called CHAOS (Create Havoc Around Our System), used successfully in its 1993 dispute with Alaska Airlines. It calls for staging unannounced mini-walkouts that can cripple company operations, while most employees remain on the job. No details about the tentative contract were released by the union, pending a mailed ballot vote by the membership. However, prior to the settlement, the airline had offered a 45 percent pay increase staggered over a five-year contract and doubling the expense payments that flight personnel receive when they are away from home — both proposals the union had previously rejected as insufficient. Flight Attendants earn a maximum of $22,000 a year, the lowest salaries in the industry. Two-thirds of the senior attendants had not had a pay raise since 1995. America West, the nation's ninth largest airline, has posted record profits in recent years. It is a subsidiary of America West Holdings, which earned $108 million last year.

Tough Bargaining Ahead on Outsourcing,
Health Costs and Demand for Higher Pay
Union and employer negotiators will confront a series of bread-and-butter issues that may be more difficult to settle than two or three years ago when they faced each other across the bargaining table.

Employers know what they want: to cut labor costs by outsourcing some of their operations to companies with a low-wage work force; by compelling employees to pay a greater share of rising health costs; by forcing unions to agree to changes in work rules that would increase productivity and by instituting layoffs. Companies say they need union concessions so they can remain competitive in domestic and global markets. They feel they are at a serious disadvantage in competing with non-union rivals, and they ask for concessions in the interests of both their employees and themselves.

Because of a tight labor market and a booming economy, unions also have a set of demands for which they will argue more aggressively than in former years. Many unions feel that their members are entitled to substantial wage increases and benefits because they made concessions to employers when times were tough. They will be insisting that wage increases be tacked onto their base hourly rate, rather than treated as lump-sum payments and bonuses that leave the base rate unchanged.

Job security is still the top demand with most unions that are preparing for contract talks. Hundreds of thousands of good-paying jobs have been lost in the past two years through corporate downsizing and plant closings. A particular cause for union concern is the growing trend of companies to send part of their production operations, which are normally done by in-house employees, to non-union subcontractors with a low-wage work force.

Subcontracting and the threat of plant closings were key issues in the eight-week General Motors strike by the United Auto Workers that shut down virtually every GM plant in North America. Not only the auto workers, but steelworkers, Teamsters, machinists and others will be seeking restrictions on outsourcing in negotiations totaling hundreds of thousands of workers.

A Battle Over Health-Care Costs
There was a time when employers assumed the full cost of health care, but for most workers, even those protected by unions, that is no longer true. With the cost of health insurance rising from 6 percent to 20 percent and in some cases even higher, employers are insisting on shifting some of the added costs of higher premiums to their employees. Over the years, union members have seen increases in the amount of deductibles, co-payments and the cost of prescription drugs.

Unions will strongly oppose shifting the burden of rising health-care costs to their members, but will take a cooperative stance toward constructive measures to control costs. They may also seek changes to improve the quality of medical services their members are receiving.

Most employers and unions will seek three-year contracts, but a trend has been developing for four-year contracts and even longer. In good times, unions generally favor longer contracts because they assure stability.

Big-Time Contract Renewals
The United Auto Workers faces some tough bargaining with the "Big Three" automakers — General Motors, Ford and Daimler-Chrysler — when their contracts expire on September 14. The UAW will be negotiating for the 400,000 workers employed by the big three companies. Since the last three-year contract, the industry has undergone dramatic changes which are bound to influence the give- and-take bargaining. There are the big mergers of Chrysler with Daimler-Benz and Ford with Volvo; new plants to be opened and others closed, and changes in the top management of the three companies.

The United Steelworkers of America (USA) will be negotiating with domestic steel manufacturers to renew a contract that expires in late July. Approximately 75,000 workers will be affected by the outcome. Negotiations will be complicated because the union and domestic steel manufacturers have joined forces in a campaign to reverse the sharp decline of U.S. steel production caused by heavy imports from Japan and South Korea. Layoffs have taken place in many of the big steel mills, making job security a prime item at the bargaining table.

The International Association of Machinists and Aerospace Workers is preparing its negotiating strategy as it gets ready to meet with the "Big Three" aerospace cornpanies — Boeing, Lockheed Martin and Raytheon — which account for nearly 70 percent of the industry's sales. The union will be bargaining for 71,000 members. One sticky problem for the union will be Boeing's announced plan to lay off 48,000 workers in the next two years.

Several important negotiations will be taking place in the airline industry. The Flight Attendants, representing 20,000 members, will be seeking a contract renewal with American Airlines. The union is hoping to avoid the stormy 1993 bargaining which led to a five-day strike settled by binding arbitration. The negotiations between the United Airlines and the Air Line Pilots Association (ALPA), with 9,600 members, are unusual because United is an employee-owned airline.

A major Teamsters contract that will be up for renewal covers 12,000 union drivers who transport cars from factories to dealer showrooms. James P. Hoffa, the new IBT president, will lead the union's negotiating team.

In the railroad industry, the national freight agreement covering 100,000 employees will be up for renewal at the end of the year. The United Transportation Union and the Brotherhood of Locomotive Engineers, which have agreed to merge, will bargain jointly for their members. The last contract was signed in October 1996. The signatories were 35 major railroads and 12 unions.

Machinists OK Pact for 6,150

A strike was averted when the International Association of Machinists (IAM) negotiated a three-year contract with the Lockheed Martin Corp. for 6,150 workers at its two facilities in Marietta, Ga. and Palmdale, Cal. The agreements, which were ratified by the workers at both plants, call for a 3 percent increase and a lump-sum payment of $600 each year.

A company plan to shift some employees to a 10-hour, 4-day week, which the workers had previously rejected, was not included in the final contracts, although the subject will be discussed by a joint committee. The company also agreed to a 17.5 percent increase in retirement benefits — from $40 to $47 for each year of service, and raised the basic life insurance to $23,000.

3% Deferred Pay Increases in 1999-2000

Workers covered by multi-year contracts will receive an average 3 percent increase for 1999 and possibly the same for the following year, according to a Bureau of National Affairs study of 1,428 collective bargaining agreements.

The printing industry led all others with an average wage increase for 1999 of 7.2 percent in current contracts. Next in line was construction with a 4 percent pay raise. Industries with the poorest record of deferred pay raises for this year were the rubber industry (1.1 percent) and insurance-finance (0.5 percent).

2,500 NBC Staffers Ratify 3-Year Pact

By an overwhelming 80 percent vote, 2,500 technicians at the National Broadcasting Co. ratified a three-year agreement that provides wage increases of 3 percent a year, an additional paid holiday (Martin Luther King's birthday) and improved contract language.

The agreement was negotiated by the National Association of Broadcast Employees and Technicians (NABET), an affiliate of the Communications Workers of America. It covers camera operators, writers, producers, editors and technical staff employed at NBC facilities in New York, Chicago, Los Angeles and Washington.

In a high-pressure industry where employees must be shifted around quickly to accommodate new situations and revised schedules, there were some improvements for employees in regard to penalty payments for call-ins on days off and for cancellation of events.

NBC was able to get an increase in its "daily hires," from 35 percent to 50 percent, in addition to contract changes that give it greater flexibility in its operations.

Flight Attendants Win at America West

After waiting more than four years to gain their first contract from America West Airlines, the Association of Flight Attendants finally achieved their goal a few minutes past a union-imposed, March 20 deadline. The five-year agreement affects 2,400 employees.

The final negotiations came after a 30-day cooling-off period ordered last month by the National Mediation Board under the Railway Labor Act, after the union had rejected an offer of binding arbitration and was prepared to take its own brand of strike action. Had no settlement been reached, AFA would have engaged in "guerrilla warfare" against the airline by activating a plan it called CHAOS (Create Havoc Around Our System), used successfully in its 1993 dispute with Alaska Airlines. It calls for staging unannounced mini-walkouts that can cripple company operations, while most employees remain on the job.

No details about the tentative contract were released by the union, pending a mailed ballot vote by the membership. However, prior to the settlement, the airline had offered a 45 percent pay increase staggered over a five-year contract and doubling the expense payments that flight personnel receive when they are away from home — both proposals the union had previously rejected as insufficient.

Flight Attendants earn a maximum of $22,000 a year, the lowest salaries in the industry. Two-thirds of the senior attendants had not had a pay raise since 1995. America West, the nation's ninth largest airline, has posted record profits in recent years. It is a subsidiary of America West Holdings, which earned $108 million last year.

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