Printer Friendly

NEW NAVISTAR-UAW LABOR AGREEMENT RATIFIED BY EMPLOYEES

 CHICAGO, Jan. 25 /PRNewswire/ -- Over the weekend, employees of Navistar International Transportation Corp. (NYSE: NAV) who are represented by the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) ratified a new labor agreement, which became effective immediately upon ratification this weekend and will extend through Oct. 1, 1995.
 Approximately 7,600 production, maintenance and clerical employees at Navistar facilities in Georgia, Illinois, Indiana, Maryland, Ohio and Texas are covered by this new labor agreement.
 The previous UAW/Navistar agreement, which had been in effect since November 1990, was scheduled to expire on Oct. 1, 1993, but was opened by mutual agreement as the next step in addressing Navistar's $200 million competitive cost disadvantage.
 "This new labor agreement is based on a thorough analysis and understanding of the company's competitive cost position," said James Cotting, Navistar's chairman and chief executive officer. "That we were able to work so quickly and collaboratively to resolve some very complex issues is a significant accomplishment, and is a reflection of the tremendous effort put in by the UAW and Navistar negotiating teams."
 Briefly, the new labor agreement includes the following provisions:
 -- UAW-represented employees will receive two 3 percent lump sum payments (one on Oct. 1, 1993, and the second on Oct. 1, 1994).
 -- The pension benefit levels that were negotiated for the previous agreement will remain in effect for this new agreement. Two lump sum payments of $400 each will be paid to retirees in March 1994 and March 1995, in addition to a previously scheduled $200 payment in June 1993.
 -- A joint Navistar/UAW Committee will mutually select health care providers to form a coordinated health care network with the goal of improving quality and reducing costs. Current health care plans for UAW-represented employees will remain in effect until these coordinated health care networks are established by the joint committee. Once the coordinated health care networks are established, employees residing within designated network areas who choose to use network providers will receive coverage for physician office visits with a $20 per visit co- payment. Currently, they receive no coverage for physician office visits. Employees residing within a designated network area who do not choose to use network providers will be required to pay 25 percent of the usual and customary charges. The maximum out-of-pocket expenses for employees who do not use health care providers within a designated network will be $1,000 per individual and $2,000 per family. Employees who reside outside a designated network will continue with their current benefit program without penalty, and will be allowed access to the coordinated network program.
 -- The two-for-one attrition provisions of the Navistar Employment Target Program have been suspended. These suspended provisions previously required that for every two UAW-represented employees that retire, one laid off worker would be called back to work from the Master Recall list.
 -- The Excess Overtime Account was suspended. Under the previous contract, Navistar had been paying penalties for all overtime worked in excess of an amount agreed upon by Navistar and the UAW.
 -- The company and the UAW agreed that there should be equality of sacrifice between represented and non-represented employees, and no annual incentives or bonuses will be paid unless there is also a profit sharing payout.
 -- The procedures for being placed on the Master Recall list have been changed to provide for a 30-day notification period and a one-time, final opportunity for laid off employees to be included on the list. Under the previous contract, laid off employees were allowed to go on and off the Master Recall list at any time.
 The new labor agreement was the second step in addressing the company's competitive cost position. The first step was previously announced in December when Navistar and the UAW reached a tentative settlement for restructuring its retiree health care costs. The tentative retiree health care settlement reduces Navistar's liability for retiree health care and life insurance benefits under accounting rules (SFAS 106) from $2.6 billion to $1.0 billion and provides retirees with a modified medical plan for life. The new plan has a present value of $1.39 billion, of which $1.0 billion is Navistar's obligation and the other $390 million will come from retiree contributions in the form of premiums.
 The retiree health care settlement is subject to court approval in the Ohio litigation, shareowner approval for the issuance of new shares of common stock and amendments to the corporate charter and various regulatory approvals. Navistar plans to seek these approvals expeditiously so that the new health care program can be implemented for all retirees as soon as possible.
 NAVISTAR RETIREE MEDICAL PLAN
 The retiree health care agreement that has been negotiated reduces Navistar's liability for retiree health care and insurance benefits under accounting rules (SFAS 106) from $2.6 billion to $1.0 billion and provides retirees with a modified medical plan for life. The plan has a present value of $1.39 billion, of which $1.0 billion is Navistar's obligation and the other $390 million will come from retiree contributions in the form of premiums. Those retirees over age 65 who are covered by Medicare will have the same range of benefits which Medicare covers, with the negotiated health care plan covering the Medicare deductibles and co-payments in excess of $200 per person. Dental, hearing and vision coverage has been eliminated. Other changes to retiree medical and life insurance coverage are summarized below.
 Under Age 65 Over Age 65 (and/or
 Medicare eligible)
 Contributions (premiums)
 per person $70/month $34/month
 Deductibles per person $200/year $200/year
 Co-payments 20 pct. of expenses None
 after deductible
 has been met
 Out-of-pocket maximum
 per person (includes
 deductibles) $500/year $200/year
 Office visits covered No Yes
 Part B Medicare
 premium None Paid by retiree
 Prescription drug $8/generic drug $8/generic drug
 co-payments $18/brand name drug $18 brand name drug
 $7/mail order (30- $7/mail order (30-
 day supply) day supply)
 Life insurance $5,000 maximum $5,000 maximum
 (limited additional (limited additional
 coverage can be coverage can be
 purchased at group purchased at group
 rates) rates)
 -0- 1/25/93
 /CONTACT: Deborah Spak of Navistar, 312-836-3232/
 (NAV)


CO: Navistar International Transportation Corp. ST: Illinois IN: AUT SU:

CK -- NY042 -- 8401 01/25/93 10:53 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 25, 1993
Words:1049
Previous Article:THE BISYS GROUP INC. ANNOUNCES LETTER OF INTENT TO PURCHASE ITEM PROCESSING BUSINESS
Next Article:STRIKE CONTINUES AT DOMINO SUGAR CORPORATION BROOKLYN REFINERY
Topics:


Related Articles
WILLIAMS CONTROLS ANNOUNCES NEW FOUR-YEAR LABOR AGREEMENT
UAW EMPLOYEES VOTE ON NAVISTAR PROPOSAL
NAVISTAR AND UAW EXTEND LABOR AGREEMENTS WHILE TALKS CONTINUE
NAVISTAR EMPLOYEES RATIFY NEW LABOR AGREEMENT WITH UAW
UAW-NAVISTAR MEMBERS RATIFY NEW THREE YEAR AGREEMENT
UAW Members Ratify New Agreement With American Axle
UAW Members Ratify New Agreement With Allison Engine
Following UAW Ratification Vote, Navistar Moves Forward With Strategies To Boost Competitiveness, Reduce Costs
Navistar Indianapolis Employees Ratify New Labor Agreement
Trico Products Corporation to Remain in Western New York; Membership Overwhelmingly Ratifies Agreement

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters