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Aluminum industry settlements.

The Aluminum Co. of America and Reynolds Metal Co., the Nation's two largest aluminum makers, and their two largest unions, the Aluminum, Brick and Glass Workers and the Steelworkers, reached agreement on 3-year contracts that featured wage increases, new managed health care plans, and enhanced incentives for early retirement. The pacts covered 17,000 production and maintenance workers at 27 sites in 17 States. The major stumbling blocks to settlement, which came just hours after the parties' master contracts expired, centered on proposals dealing with job security and health-care cost containment.

The contracts called for wage increases of 25 cents an hour in the first and third years of the contracts, with employees having the option to substitute a 50-percent company match in the 401(k) plan in lieu of the second wage increase; immediate, one-time lump-sum bonuses of $300 for employees at Reynolds and $1,150-$1,300 for employees at Alcoa; continuation of the cost-of-living adjustment provision which provides quarterly payments equal to 1 cent an hour for each 0.3-point rise in the Consumer Price Index for Wage Earners and Clerical Workers after the index reaches a 3-percent trigger; and a newly established pay-for-performance (gain-sharing) plan under which payments would be linked to attainment of jointly set local level goals and to corporate financial performance.

Bargainers agreed to institute new managed health care networks in 1994 that would provide medical, prescription drug, and mental health programs. Employees would not be required to share the costs of insurance premiums, but would pay minimal fees when using the networks and higher fees when opting for services outside the networks.

The managed health care networks would consist of primary care physicians, when available, with first-dollar coverage (except for a $10 employee copayment for doctors' visits) and preferred provider organizations for delivering mental health and substance abuse treatment and prescription drug programs. Under the prescription plans, employees would pay $5 for generic drugs and $10 for brand name drugs after satisfying a $50 deductible for single coverage and a $100 deductible for family coverage. Employees also would be eligible for a mail order plan under which a 90-day supply of prescription drugs can be purchased for $5 (generic) and $15 (brand name) with no deductibles.

To discourage spouses from waiving coverage under their employers' health care plans, bargainers established a monthly premium for family coverage if a spouse works at least 20 hours a week or earns at least $10,000 a year. The monthly premium was set at $150 for a spouse and children and $75 for children only.

Out-of-network service costs would be reimbursed at the 80-percent level after a $200 deductible for single coverage and a $400 deductible for family coverage. Employees at Reynolds also would be required to pay maximum out-of-pocket expenses of $1,000 for single coverage and $2,000 for family coverage. Mental health and substance abuse treatment programs would be available with reimbursement at the 50-percent level.

Other benefit changes increased the monthly pension rate by $2 (to $24.25-$28.25) per year of credited service; provided minimum early retirement monthly pension benefits ranging from $1,070 to $1,250 until age 62 for retiring employees age 55 or older with at least 30 years of service; boosted weekly accident and sickness benefits by $50 over the term of the contract; and increased life insurance coverage by $10,000 (to $35,000).

Other terms adopted guidelines to institute joint locally based subcontracting and employee participation programs, and improved the successorship clause to require new buyers to offer employment to current union members if the purchased plant is operated in the same business and at the same location for 1 year.
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Title Annotation:Aluminum Company of America and Reynolds Metal Co. labor contracts
Author:Cimini, Michael H.; Behrmann, Susan L.
Publication:Monthly Labor Review
Date:Sep 1, 1993
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