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Early settlement reached at Timken.

The Timken Co. and Locals 1123, 2173, and 2730 of the Steelworkers, nearly 10 months before their contract was to expire, reached agreement on a 4-year labor contract that resulted from the parties' first-time use of an early negotiations provision. The contract covers approximately 5,000 employees at the company's steel and bearing manufacturing plants in Canton, Columbus, and Wooster, OH.

The agreement includes a quarterly cost-of-living adjustment (COLA) clause that guarantees minimum payments in each year of the contract. The COLA clause provides 1 cent an hour for each 0.3-point change between a specified trigger and a cap of 6 percent in the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W). The triggers are increases in the CPI-W of 5 percent for the first 8 quarters, 3 percent for the next 4 quarters, 1.5 percent for the next 2 quarters, and zero for the last 2 quarters. Advance COLA payments of 25 cents an hour are guaranteed in September 1993, 1994, and 1995, regardless of the change in the index, and the first two will become a part of the base rate.

The parties modified several provisions in pension coverage. Effective in 1994, employees with at least 30 years of service would receive a minimum monthly pension of $1,100, an increase from $1,000, until they reach age 62; they would receive $1,000 a month following age 62. Effective in 1996, employees meeting the service requirement would receive $1,300 a month until age 62, and $1,000 after they turn 62. Employees on a disability pension, shut-down pension, or any other pension for which 30 years' service is not required, would receive a minimum base monthly retirement benefit of $742.50 in 1994 (formerly, $712.50), $772.50 in 1995, $802.50 in 1996, and $832.50 in 1997.

Effective in 1994, employees age 62 or older with at least 15 years of service or age 60 or older with at least 25 years of service would receive a minimum monthly pension of $1,100 for one year and $1,000 a month after that year. Effective in 1995, employees meeting these criteria would receive $1,300 a month for the first year and $1,000 a month following the end of that year.

Effective in 1994, employees with at least 35 years of service would receive pension benefits equal to 33 percent of their average monthly compensation, in addition to 1.2 percent of their average monthly compensation multiplied by the number of years of continuous service. These employees also would receive a Special Pension Benefit of $200 a month until they reach age 62. These long-time employees are guaranteed a minimum monthly benefit of $1,000.

Surviving spouses of employees with at least 15 years of continuous service who die before retiring would receive a monthly preretirement benefit equal to the greater of one-half of the employee's normal retirement benefit or $200, up from $140. Surviving spouses of employees with 5 years of continuous service, but fewer than 15 years, would receive benefits at the time the employee would have been eligible to retire. Spouses of employees who die after retiring would receive a postretirement monthly benefit of $200, an increase from $140, before age 60 and $150, up from $90, after reaching age 60.

Timken agreed to maintain company-paid health insurance coverage for active workers. To defray insurance premiums for retirees' medical coverage, the company would contribute at least $653 per month, an increase from $243, for each retiree under age 65 and $653 for each of their spouses and dependents. For retirees older than 65, the company agreed to contribute $295 per month, up from $121, for each retiree and $295 for their spouses and each dependent.

Negotiators improved job security and seniority provisions in several areas. The parties Added a "production pool" and a "security pool" to the current labor pool, which will help broaden employees' bumping rights. They restored accumulated continuous service to active employees who had a break in service due to a layoff or transfer between plants, and replaced line recall rights with occupational recall rights. Timken also agreed to inform the union of any anticipated contracting out and reasons why bargaining unit employees could not perform the work.

Other terms included new-hire wage rates of 80 percent of the full rate for the first 180 working days, which was lengthened from 120 days, and 90 percent for the next 40 days; recognition of a union safety committee; use of vacations at increments of one day at a time; agreement to update the job evaluation manual; voluntary retrogression because of physical or mental disability; problem solving talks scheduled for January 1995 to resolve major collective bargaining problems that may arise; a 120-day probationary period, doubled from 60 days, for new hires; and an early start on negotiations for the next contract.
COPYRIGHT 1993 U.S. Bureau of Labor Statistics
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Title Annotation:labor agreement of Timken Co. and United Steelworkers of America
Publication:Monthly Labor Review
Date:Feb 1, 1993
Words:817
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