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Copper pact.

Copper pact After a month and a half of negotiations, Kennecott Copper Corp. and 13 unions, including several Steelworkers local unions, reached a 3-year agreement, covering some 2,000 workers at the company's Bingham Canyon mine in the Salt Lake City, UT, area. (The other unions that are signatories to the agreement are the Machinists, Electrical Workers (IBEW), Operating Engineers, Office and Professional Employees, and United Transportation Union.) The new contract replaces one that was scheduled to expire June 30, 1990. The early settlement was "unprecedented in Kennecott's history," according to the company's chief negotiator in the contract talks. (The Bingham Canyon operation is the Nation's largest open-pit copper mine.)

The pact provides pay raises of about 20 percent over the term of the contract and could set a pattern for settlement at other companies in the copper mining industry. Terms of the contract partially restore pay cuts accepted 4 years ago. In the 1986 bargaining rounds, Kennecott, like other companies in the copper mining and processing industry, was plagued by severe financial problems resulting from worldwide overproduction. The company gained some reductions in labor costs in a midyear settlement that allowed it to reopen its Bingham Canyon mine and recall some 2,000 employees who had lost their jobs when the mine was shut down in 1985. Under the 1986 4-year contract, average compensation was reduced by approximately $5.40 an hour, or about 22 percent; the wage portion of compensation, which averaged about $13.50, was cut an average of $3.22. Cost-of-living adjustments were terminated. Employees were required to pay 20 percent of their health insurance cost and $350 annual deductibles for single coverage and $700 for family coverage. Deductibles were also instituted for dental coverage, vision coverage was eliminated, vacation pay was reduced, and certain work rule changes beneficial to Kennecott were made.

Under the new accord, which reflects the improved financial conditions throughout the industry, wages will increase around $2 an hour (to about $12 an hour), effective July 1, 1990. The contract also calls for general wage increases of 25 cents an hour on July 1 of 1991 and 1992. Over the term, the wage rate for mine drill operators, senior level operators in smelters and refineries, painters, and truckdrivers will increase to $13.03, while the rate for electricians and machinists will increase to $14.77 an hour.

Other terms include a $3,000 signing bonus; a $5 increase in each of the three monthly pension rate levels for each year of credited service (to $22, $23.50, and $25 for 15 years or less, 30 years or less, and 31 years or more, respectively); a 23-percent rise in the graduated sickness and accident benefit level; a $3,000 increase in each of the 21 levels ($19,400 to $24,800) of life insurance coverage; a $250 reduction in the health care deductible for single coverage (to $100) and a $400 drop (to $300) for family coverage; a new hospital pre-admission certification requirement; unspecified changes in grievance and arbitration procedures and in seniority; a new tax-deferred savings plan, under which employees can "defer" (invest) 2 percent to 16 percent of their annual gross earnings; continuation of the 80/20 health care copayment, with Kennecott paying the full cost of health insurance premiums; and a 6-month trial program that allows some 200 smelter employees to select assignments and work schedules.
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Title Annotation:Developments in industrial relations; Kennecott Copper Corp.
Author:Cimini, Michael H.
Publication:Monthly Labor Review
Date:Aug 1, 1990
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