Bargaining stalls between Sanipac, union.

Byline: Joe Harwood The Register-Guard

CORRECTION (ran 7/21/2005): A story on Page D1 on Wednesday provided an incorrect hourly wage for the majority of Sanipac truck drivers. Most garbage and recycling truck drivers earn $17 per hour, plus an additional $2 per hour that goes to their pension funds.

The 101 Sanipac garbage truck drivers and mechanics represented by Teamsters Local 206 could vote as early as tonight whether to authorize a strike after bargaining stalled and the two sides called in a federal mediator.

As union members consider whether to give their leaders the ability to call a strike, the Eugene-Springfield area's largest trash-hauling company is taking applications for replacement workers just in case a walkout does occur.

"There is talk of a strike, and well over 90 percent of our people have said they would strike," said Stefan Ostrach, a union representative for Local 206.

Negotiators for Sanipac and the union are scheduled to meet this morning with the mediator, Ostrach said.

John Hire, Sanipac's general manager, said he is optimistic that the company can hammer out an agreement with workers and avert what would be the first strike in the company's 33-year history. But he's not taking any chances, and has started lining up replacements as a precaution.

"I would be remiss in my duties if I didn't plan for the worst and hope for the best," Hire said.

The four-year labor agreement expired July 1, but the sides agreed to extend it to the end of the month, Ostrach said. If a strike breaks out, it won't happen until August.

Such a strike would be felt by consumers almost immediately. Sanipac controls an estimated 70 percent of the Eugene commercial garbage market and 80 percent of the residential market. The company holds the exclusive franchise to provide trash collection services in Springfield. And after Sanipac bought several small competitors over the years, only two rivals remain for Sanipac in Eugene - Royal Refuse Service and Lane-Apex Disposal Service.

The biggest stumbling block to reaching an agreement is the cost of health care benefits.

Health care cost-sharing has emerged as the biggest bone of contention between management and labor in many industries in recent years as huge increases in annual premiums have battered employers and their workers.

The costs of providing health insurance to workers and retirees rose 16 percent in 2003, and that's after increases of 14 percent in 2002 and 13 percent in 2001, according to Families USA, a nonprofit health care advocacy group.

Those steep increases are forcing many private-sector companies to drop insurance coverage altogether, or pass along the rising costs.

Health care cost-sharing played the dominant role in a weeklong strike by Lane Transit District bus drivers four months ago.

In the case of Sanipac and its drivers and mechanics, the company is seeking to implement a health insurance plan that would include, for the first time, employee deductibles and lower benefit coverage, Ostrach said.

Under the current contract, employees pay a flat rate of $272 a month for their share of health insurance - which includes family members - and pay no out-of-pocket deductibles. Under the Sanipac proposal, employees would pay $28 per month, but would pay out more than that because many services would be covered at a lower rate after deductibles, Ostrach said.

"We're trying to figure out how we control our (health care) costs right now and what that number might be four years in the future," Hire said. "But we have this 800-pound gorilla sitting out there looking at us and we also have wages and pensions" to work out.

Sanipac drivers make $16.52 to $21.41 per hour plus benefits.

Hire said it's tough bargaining the health care issue because about half of the work force has been with Sanipac for 15 years or more. "It's almost like a family issue you're trying to solve," he said.

Ostrach and Hire said wages are a secondary issue right now, taking a back seat to health benefit cost-sharing. Both declined to discuss specific wage and other economic issues and said the proposals are likely to change in the mediation sessions.

Hire said agreements reached in the past have always come after the two sides brought in a mediator.

"At this time of the month, this is where we usually are," he said.

Sanipac, with a total of 125 employees, is owned by the Pape family of Eugene.