Printer Friendly

UAW, GM-Ford contracts focus on saving jobs.

Increasing worker job security was the primary goal in the United Auto Workers' (UAW) bargaining with General Motors Corp. (GM) and Ford Motors Co. The first settlement, with GM, established a Job Opportunity Bank-Security Program described by the union as "without equal in the history of collective bargaining with a major U.S. corporation."

After the GM settlement, which was preceded by a strike at some locations, the UAW and Ford settled without a strike. Terms for the 115,000 Ford workers were essentially identical to those for the 350,000 GM workers, except that the Ford contract bans plant closings. Ford appartently was willing to accept this ban because it produces substantially fewer of is parts than GM, and therefore is not as likely to increase outside purchases, which could less to plant shutdowns.

The new Job-Security Program guarantees that workers with at least 1 year of service will not be laid off as a result of the introduction of new technology, "outsourcing" (procuring parts from other manufacturers), negotiated productivity improvements, shifting of work from one GM plant to another, or the consolidtion of component production. Layoffs for other reasons--such as declines in vehicle sales or sale of a facility--are not covered. The progam will extend through the new and succeeding contract or until GM's commitment of $1 billion is exhausted. (At Ford, with fewer employees, the commitment is $300 million.)

Facing a layoff, workers will first exerciese their right to "bump" less senior workers. After this procedure is completed, any employees with at least 1 year of service who would ordinarily be laid off will participate in an Employee Development Bank, where they will receive the pay rate of the last job they held or if assigned to another job, the rate for that job. Other possible assignments for bank members include job training; replacing another worker undergoing training; moving into a job opening at another GM plant if there is no qualified worker with recall or rehire rights; and moving into jobs within or outside the local bargaining unit, including "nontraditional" job Temporary assignments outside the local bargaining unit will be voluntary. Permanent transfers to UAW bargaining units at ohter GM plants will be filled by volunteers, if possible. Any remaining openings will be filled in inverse seniority order.

Changes in the bank size will not correspond to changes in production volume, but will be reduced by one for each bank member who quits GM or otherwise breaks or loses seniority (excluding discharge) or enters apprenticeship or other training; transfers to an opening in the local plant or another GM plant created by a reason other than a production volume increase; or transfers to a salaried job.

Employees who do participate will continue to accrue pension credits and be covered by all other regular benefits, such as insurance, and paid holidays and vacations.

the Job-Security Program will be administered by joint UAW-GM committees at the local, area, and national levels. The national committee is permitted to set up special programs when there are more employees in the bank at a plant than anticipated openings at the local and area level. These programs would provide pensions calculated at unreduced rates and various supplements to departing bank members who are age 55 to 61 with 10 years of service. Departing bank members who do not meet the age and service requirements would receive lump-sum payments of $10,000 to $44,000, based on seniority.

The union did not win its demand for a ban on outsourcing or a continuation of the provision (adopted in 1982) prohibiting GM from closing plants due to outsourcing. However, GM must give the UAW 60 days' notice of outsourcing decisions affecting 25 or more existing jobs. Previously, the requirement applied to decisions affecting 10 percent of a plant's work force, or 100 workers, whichever was less. Job preservation also will be on the agenda of the new local Job-Security committees, which will discuss "sourcing" issues, review competitive conditions, and develop plans to improve local operations. Also, GM agreed to recommend implementation of the Saturn small car program to the GM board of directors, assuming that production concepts conceived by a GM-UAW study team prove workable. The joint attempt to revolutionize domestic car production to counter the increasing inroads of foreign manufacturers was initiated in 1982. Other layoff assistance. There also were improvements in the Guaranteed Income Stream and Supplemental Unemployment Benefits programs, both of which provide employees with a financial cushion if they are laid off.

Funding of the Guaranteed Income Stream was raised to a maximum of $185 million plus additional amounts from the profit-sharing plan during the contract term. (The funding level was $100 million under the 1982 contract.) The plan covers workers with at least 10 years of service who are laid off due to a plant closing and those with at least 15 years of service who are laid off for any reason. After their Supplemental Unemployment Benefits entitlement is exhausted, these workers draw Guaranteed Income Stream benefits until they retire or return to work, or until GM's maximum financial obligation is reached. The weekly Guaranteed Income Stream benefit is 50 percent of the individual's weekly base earnings on the last day of work plus 1 percent for each year of seniority above 15 years. The maximum benefit is the lesser of either 75 percent of base earnings or 95 percent of after-tax earnings minus $12.50 ($17.50 on or after January 1, 1985).

GM's financing of Supplemental Unemployment Benefits was increased to a range of 19 to 31 cents per compensated hour in January 1985, 20 to 32 cents in January 1986, and 21 to 33 cents in January 1987. Previously, the obligation, which varies with the level of the fund, was 17 to 29 cents per hour. The Advance Credit Account, which provides benefits if the regular fund is exhausted, was strengthened by increasing its "base" to $200 million, from $100 million. Any GM payments into this fund are offset aginst future obligations. Funding also was strengthened for the Guaranteed Benefits Account, which pays benefits to laid-off workers with at least 10 years' service if the regular and Advance Credits Accounts are depleted. GM payments into this account are not offset against future obligations.

In another move the union described as a "first," GM and the UAW will jointly develop and launch new businesses aimed at providing jobs for UAW members. The program, to be financed by GM up to a maximum of $100 million, will be administered by a joint Growth and Opportunity Committee. Proposals for ventures, including those made by local Job-Security Program committees, will be studied by a New Business Benture Development Group, which will have a full-time staff. Ventures will be aimed at aiding communities hit by job losses at GM facilities, with hiring preference given to the affected workers. Overtime restricted. The union, which in recent years has been pressing for curbs on overtime to spread the available work among as many workers as possible, won a requirement that GM pay 50 cents per hour for all overtime hours in excess of 5 percent of straight-time hours into the Joint Skill Development and Training Fund. In a related provision, GM agreed to a goal of reducing average weekly overtime by 2 hours. "Spreading the work" also was furthered by the addition of three paid holidays, bringing the total to 44 over the 3-year contract, which ends on September 14, 1987.

The overtime work penalty payments into the Joint Skill Development and Training Fund, and a 10-cent-an-hour contribution by GM for all hours worked, will help finance training for active and laid-off employees. Laid-off workers are eligible to receive tuition assistance ranging from $1,500 for those with 1 year of service to $5,000 for those with 4 years or more of service. Active employees are eligible for payments of $1,500 a year for courses at colleges and universities and $1,000 a year for other job-related courses and certain other training in accredited schools.

The settlement does not provide for specified wage increases in every contract year. This reflects company efforts to end the practice of providing guaranteed annual wage increases regardless of corporate financial results. The workers will receive one specified wage increase and a $180 "Special Payment," effective immediately; lump-sum "Performance Bonus" payments in October of 1985 and 1986; continued automatic pay adjustments under the cost-of-living formula; and continued profit-sharing distributions. The union forecast that the combined yield would be $11,730 over the term (including $3,000 in profit sharing), assuming a 5-percent annual rate of increase in the Consumer Price Index and continuation of the projected 1984 profit level. This would contrast with the 1982 accord, which only provided for cost-of-living adjustments and profit-sharing distributions.

The immediate specified wage increase ranged from 9 cents an hour for the lowest paid workers to 50 cents for the highest paid. According to the union, the 9- to 50-cent increase plus the projected future cost-of-living adjustments will raise the range to $13.93 for workers in the lowest bracket to $16.20-$16.47 for those in the top bracket. Prior pay rates, including a cost-of-living allowance, ranged from $12.29 an hour for workers in the lowest pay bracket to $17.19-$17.46 for those in the top bracket.

The performance bonuses, to be paid in October of 1985 and 1986, will amount to 2.25 percent of pay for all compensated hours, including overtime hours (but not overtime premium pay), vacation and holiday pay, and shift premiums. The union estimated that the payments would be $725 and $750, respectively, using the assumed 5-percent inflation rate and compensated hours equivalent to the 1983 total.

The cost-of-living adjustment formula provides for 1-cent-an-hour quarterly adjustments for each 0.26-point movement in the BLS Consumer Price Index for Urban Wage Earners and Clerical Workers (1967 = 100), with 1 cent permanently diverted from each of the firest nine adjustments, and 2 cents from each of the two other adjustments. The diverted money will help offset GM's cost increases for benefits. Previously, adjustments were computed at 1 cent for each 0.26-point movement in a composite 1967 = 100 index derived from the U.S. and Canadian consumer price indexes. (The change was made because the formula for GM's Canadian employees is now linked to the Canadian government's index only.) Under the 1982 contract, each of the first three quarterly adjustments were deferred for 18 months and a total of 6 cents was permanently diverted from these adjustments. Other contract provisions. The new contracts also provide:

* A $3.85 increase in the pension rates over the term for workers retiring from October 1, 1984, through September 30, 1985, bringing their April 1, 1987, range of rates (which vary by preretirment earnings) to $21.85-$22.60 a month for each year of credited service; a $3.95, through September 1, 1986, bringing their range to $21.95-$22.70; and a $4.05 increase for those retiring on October 1, 1986, or later, bringing their range of rates to $22.05-$22.80. The provision for "30 [years]-and-out" retirement was revised to provide total monthly benefits of $1,185 for employees who retire from October 1, 1984, through September 30, 1985, $1,195 for those who retire from October 1, 1985, through September 30, 1986, and $1,205 for those who retire later. The benefit consists of a pension amount and a supplemental payment; the supplement ceases at age 62. There also were improvements in benefits for current retirees, including a $1 increase in the calculation rate for normal benefits. Employees who retired prior to October 1, 1984, with at least 30 years of credited service will receive special $200 payments in December of 1985 and 1986.

* Addition of a third type of optional health insurance coverage, some improvements in the existing "traditional" and Health Maintenance Organization plans, and adoption of "preauthorization" and review procedures to preclude unnecessary surgery and shorten hospital stays. According to the union, the new Preferred Provider Organization coverage provides a broader range of benefits than the existing plans "while maintaining quality safeguards and assuring effective, affordable, and cost-efficient delivery of care."

* An increase in GM's payment toward Medicare Part B premiums from the $13.50 a month to $14.60 on October 1, 1984, and $15.60, $17.60, and $19.60 on January 1 of 1985, 1986, and 1987.

* The range of services provided by the legal services plan was increased and the eligibility requirement was reduced to 12 months of service, from 18. These changes, and others, were financed by a $17 million surplus that had accrued during the 1982 agreement, which established the plan. GM will continue to finance the plan at the rate of 3 cents per straight-time hour and, in a change, it will provide any additional money needed to maintain the plan. (At Ford, a legal services plan was established under the 1984 settlement.)

* Adoption of a bonus plan to improve attendance. Beginning in 1985, employees will receive $50 for each quarter year in which they work all scheduled straight-time hours in the regular workweek. Those who receive three quarterly bonuses in a year will receive an additional $150 for a combined total of $300 and those who receive four quarterly bonuses in a year will receive an additional $300 for a combined total of $500. This bonus provision was one of the changes to the 1982 attendance plan, which continues to penalize workers who have excessive unwarranted absences by reducing their holiday, vacation, and other benefit entitlements. The resulting $9 million benefit cost saving that had accrued during the 1982 contract was transferred to an existing national training fund.

* An increase to 25 cents (previously 20 cents) in the hourly premium paid to employees for all hours worked in continous 7-day-a-week operations.

* Increases in the relocation allowance to employees who transfer to any other GM plant when there is a shift of major operations from their home palnt to another GM plant. The allowance now ranges from $580 for single employees moving 50-99 miles to $2,310 for married employees moving 1,000 miles or more, compared with the previous $500 to $2,025.

* Revision of the employee stock ownership plan to provide for GM financing equal to 0.5 percent of employees' pay. Previously, financing varied with GM's spending on plant and equipment. In another change, dividends will be distributed annually instead of accruing until retirement or other termination of employment.

* Establishment of an experimental child-care program at one location. The program will assist employees in obtaining child-care services "appropriate for each employee's particular needs."

The bargaining leading to the September 21 settlement at GM began in July. Initially, the union was concurrently negotiating with Ford, but reverted to the usual "divide and conquer" strategy by suspending talks with Ford and focusing on GM. Intense bargaining continued to the September 14 expiration date of the contract, but the parties were unable to reach agreement and the union struck GM's Warren, MI, technical center and 12 assembly plants in nine States, purportedly over local issues. Apparently, the union struck these key facilities, rather than calling a company-wide strike over national issues, because a companywide stoppage could not be ended until a settlement is reached and approved by a majority of all UAW members at GM. A companywide strike also would have been a greater drain on the union's $563 million strike fund. The stoppage was later extended to four additional plants, bringing the total number of strikers to 91,000. At that time, an additional 19,000 GM employees were on layoff because of shortages resulting from the strike. Immediately after the settlement, employees began returning to work. The national terms were approved by the UAW's 300-member council; then members of the 149 local unions approved the contract, 138,410 to 102,528.

Following the GM settlement, Ford and the UAW resumed negotiations. A settlement was reached in mid-October, ending a marathon 24-hour bargaining session. Ford workers approved the agreement by a vote of 33,312 to 18,386.

Despite the settlements on companywide issues at GM and Ford, bargaining was continuing on local issues. In these talks, conducted by local union and plant officials, the companies were attempting to offset part of the labor cost increase resulting from the national accords by pressing for changes in staffing levels, job assignments, output requirements, and other areas.

UAW President Owen Bieber said he would ask Chrysler Corp. to reopen negotiations for 65,000 workers despite the fact that the current 2-year contract is not scheduled to expire until October 1985. A company official said Chrysler would listen to a reopening proposal because "there may be some things that we would like them to do for us." Coal settlement peaceful

Despite a change in union leadership, splintering of the management bargaining group, high unemployment, and a history of long, bitter strikes, the United Mines Workers (UMW) and the Bituminous Coal Operators' Association (BCOA) settled peacefully on a 40-month contract. Both sides exulted in the new spirit of cooperation and indicated that it will continue as they attempt to deal with problems, which stem from increased foreign competitions; easing of the petroleum crisis, which has slowed the shift to coal as a fuel for power plants and other facilities, and also slowed the development of a national "synfuels" energy policy; growing production by nonunion domestic producers; and possible legislation to counter "acid rain" that could reduce coal burning.

Bobby R. Brown, chief executive officer of Consolidation Coal Co. and head of the BCOA, described the agreement as "fair and modest," and noted that it gives the industry an 80-month period (from the 1981 settlement to the January 31, 1988, termination date of a new contract) without a national strike. This, he said, will give a "clear message to our customers and competitors" that the industry is a dependable energy source.

Rich Trumka, the coal miner-attorney who won the presidency of the union in 1982 on a promise to stabilize and revitalize the union after years of chaos, said the new contract, has "no concessions, absolutely none. Not a single one. We made economic . . . [and] other gains." Delegates to the union's prebargaining convention had given Trumka a simple mandate for the bargaining: "No backward steps. No takeaway contracts."

During the negotiations, which began in April, the union had indicated that it would settle on modest economic gains if the mine operators accepted other terms designed to cut unemployment. (About one-third of the industry's 160,000 UMW members are unemployed.)

The contract provides for a total of $1.40 an hour in wage increases (compared with $3.60 over the 40-month term of the prior contract) consisting of 25-cent increase on October 1 of 1984, 1985, and 1987, and a 30-cent increase on October 1 of 1986. In addition, workers will receive 5 cents "quarterly" wage increases on January 1, April 1, and July 1 of 1986 and 1987, and on January 1, 1988. These increases will result in hourly rates ranging from $13.924 to $15.565 for underground workers at deep mines (who are paid for 8 hours per shift), $14.946 to $16.328 at strip and auger mines (7.25 hours' pay), and $14.907 to $15.514 at preparation plants and other surface facilities at deep or surface mines (also 7.25 hours' pay). These increases ranged from 11.2 percent (for the lowest paid workers) to 9.9 percent (highest paid) for underground workers, 10.3 to 9.4 percent for strip and auger workers, and 10.4 to 9.9 percent for preparation plant and related workers.

The UMW did not win the curbs on overtime it had sought to increase the number of jobs available for its members, but it did gain changes in other provision intended to increase job security:

* New language ensures that miners will not lose their bidding rights to a job at their mine because the mine has been subleased to another company. The union had charged that in many cases new operators had used loopholes in the contract language to evade hiring incumbent employees.

* Mine owners are not required to give local union officials copies of warranties covering any onsite work being performed by outside contractors. The union said this was necessary because some mines were contracting out work that should have been performed by UMW members.

* UMW members shall perform all work "of the type" customarily done at the mine. The u nion said this provision was necessary because some mine owners had previously been able to contract our some work because it was not the exact work performed by UMW members.

* A company is required to notify the union of the sale of a mine where a UMW contract is in effect and to furnish proof that the buyer will abide by the terms. Previously notification was not required and, the union claimed, some new owners were able to "break" the labor contract.

* The BCOA and UMW will establish a "Joint Interests Committee" to promote the development and use of UMW-mined coal. The committee, which replaces the "Joint Industry Development Committee," will undertake activities such as contesting acid rain legislation, developing coal export capabilities, and developing a coal-based national energy policy.

Benefit improvements included a $10 a month increase in pensions for all current retirees effective immediately and on October 1, 1987. Survivors of retired workers will receive $5 a month increases on the same dates. For current employees, pension rates were increased by $1 for those retiring during after September 30, 1987. For the latter retirees, pensions will be computed at the resulting rates of $17 a month for each of the first 10 years of service, plus $17.50 a month for each of the next 10 years, plus $18 for each of the next 10 years, plus $18.50 for each year in excess of 30.

Other terms included a 20-cent-a-ton increase in the royalty paid into the miner's health and retirement funds by mine owners on coal they produce; an increase in life insurance to $30,000 (from $25,000); a $190-a-week sickness and accident benefit (formerly $185) increaseing to $195 in the second year and to $200 in the third year; and $160 clothing allowances on October 1 of 1984, 1985, 1986, and 1987 (under the prior contract, the workers received three $150 allowances).

At the time of settlement, the BCOA comprised only 32 companies, compared with about 130 at the time of the 1981 settlement. The withdrawals occurred because some companies believed they could individually negotiate more lenient terms. However, UMW President Trumka announced that he would not bargain with companies that dropped out until after the BCOA settled. The possibility of being struck while the BCOA companies and others operated led many of the dropout companies to sign letters of intent with the union in which they agreed to be bound by the subsequent BCOA accord. Some did not sign the letters, but accepted the BCOA terms immediately after they were announced. The few companies that did not sign were briefly struck by 2,000 employees.

Meanwhile, bargaining was continuing between the UMW and the Association of Bituminous Contractors, comprising companies that open mines and build related facilities. This bargaining covers about 10,000 workers, most of whom were on layoff. City workers in Philadelphia settle

The City of Philadelphia and unions representing 13,600 workers agreed on a 2-year contract that called for a single 8-percent wage increase at the beginning of the school year. An arbitrator later awarded 2,700 firefighters terms similar to the negotiated contract and awarded a similar, but earlier, payment to 7,500 police officers. Unions involved in the settlement and awards included the American Federation of State, County and Municipal Employees (AFSCME), the Fraternal Order of Police, and the International Association of Fire Fighters. Grocery workers settle, avert walkout

A threatened strike by 65,000 workers was averted when nine locals of the United Food and Commercial workers agreed to a 3-year contract with the Food Employers Council, comprising 12 grocery chains with stores in Sourhtern California.

Under the settlement, top-rated clerks witll receive increases totaling 85 cents in their $11.70 an hour pay rate, General merchandise clerks will receive increases totaling 59.5 cents if they were hired prior to August 7, 1981, and 55.25 cents if hired later. "Courtesy" clerks will receive a total of 30 cents. Another pay issue was resolved when the employers agreed to guarantee each employee at least 16 hours of work a week. The union, which contended that 70 percent of the employees worked less than 28 hours a week, had originally sought a 25-hour guarntee.

Management won a "favored nations" clause, contending that the union had unfairly agreed to lower wage and benefit levels with some chains that are not members of the council. The clause provides that if one of the local unions and an independent store with at least 25 employees agree to reductions in labor costs, the same reductions will be extended to the stores of the council members within the jurisdiction of the local.

The 1,334 stores covered by the settlement are in an area extending from San Luis Obispo to the Mexican border. The stores are owned by Albertson's, Alpha Beta, Boys, Hughes, Lucky, Mayfair, Pioneer, Ralp's Safeway, Smith's Food King, Stater Bros., and Vons. Employees rate coworkers' performance

In an unusual move, Levi Strauss & Co. announced that it will consider the opinions of fellow employees in determining who to include in an impending layoff. A company official said, "Most of the people who are laid off will clearly have not performed well enough to be retained." The new procedure will be useful in determining which of the marginally satisfactory workers should be retained. The layoff will total 400 employees. Under the new "Objective Judgment Quotient," each of the 2,000 executive, sales, and other nonunion white-collar employees will be rated by a group of up to nine employees. Members of each group will be selected by the worker being rated.

More than 300 factory workers have already been laid off because of a decline in demand for blue jeans. The company announced that an additional 2,500 will be laid off by mid-1985 as a result of the closing of several plants and cutbacks at others. In this case, the employees will not have a voice in retention decisions. These workers also are not represented by a union.
COPYRIGHT 1984 U.S. Bureau of Labor Statistics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1984 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Monthly Labor Review
Date:Dec 1, 1984
Previous Article:Use of employment data to estimate office space demand.
Next Article:A needle, a bobbin, a strike: women needleworkers in America.

Related Articles
Ford-UAW contract bolsters job security.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters