Ready to strike at Freightliner

Nearly 1,100 workers at Portland’s largest manufacturer, Freightliner, were preparing to strike July 1 after strongly rejecting the truck maker’s mediated contract offer June 25.

Workers at the Swan Island facility in North Portland are represented by Machinists Lodge 1005, Teamsters Local 305, Service Employees Local 49 and Painters and Allied Trades Council 5. In separate voting held June 25, Machinists voted 706 to 57 to reject the contract proposal and 713 to 35 to strike; Teamsters voted 117 to 24 against the proposal; Painters voted 99 to 4 against and janitors voted 18 to 3 in opposition.

Another round of bargaining was called by federal mediator Jim Bailey for Wednesday, June 30, in hopes of averting a strike.

Freightliner is at the end of a scheduled week-long plant shutdown. Work is scheduled to resume July 5, but as this issue went to press (June 29), employees were retrieving toolboxes and preparing to set up picket lines July 1, when the previous contract expired.

Steve Hillesland, assistant to the directing business representative of Machinists District Lodge 24 and chief spokesman for the four Freightliner unions, which negotiate as a group, told the Northwest Labor Press that even if a tentative deal is obtained June 30, it won’t be voted on until July 5 because too many members are away on vacation.

Union officials had recommended ratification of the June 25 proposal and were surprised by the vote.

“I’ve never seen this much solidarity before,” Hillesland said.

The rejected proposal would have given workers a $2-an-hour wage increase and a 45-cent-an-hour hike in pension contributions over the three-year term. It also called for increased out-of-pocket expenses for health insurance premiums. Currently, employees co-pay anywhere from $40 a month for an individual to $130 a month for a family of three or more. The company wanted an additional $20 a month over each of the next three years, determined by how much premiums increase each year.

Freightliner employees are particularly upset because the wage and pension offer didn’t come close to making up for concessions they voluntarily gave up in 2001, when the company was pleading poverty. In 1999, workers also agreed to a one-year contract extension.

Local 1005 Secretary-Treasurer Joe Kear told the Northwest Labor Press that workers agreed to open their contract in 2001 after Freightliner reported losses of $1.2 billion.

“We gave back pay raises, pension increases and bonuses, and we agreed to start co-paying some of our medical,” Kear said. “We figure it cost about $20,000 per member.”

Hillesland said the negotiating team agreed to take the proposal to a vote only after the company agreed to surrender its demands for two-tier wages for new hires and recalls, mandatory overtime and time-and-a-half pay instead of double-time for work on Saturdays.

“The people want their concessions returned and a normal cost-of-living-adjustment,” Hillesland said. “We’ll return to the table with a renewed vigor to meet our members’ needs.”

As Freightliner was losing money it underwent major restructuring — including the closure of its unionized Portland parts plant. The workforce was reduced by 2,000 and those who remained on the payroll continually were threatened with a shutdown if concessions weren’t made.

Today, Freightliner admits that it has turned the corner financially. On April 29, 2004, the company’s truck and bus manufacturing division reported operating profits for the quarter ending March 31 of $329 million, up from $51 million in the previous year. Sales of the Western Star brand of trucks, built exclusively at the Portland factory, rose by 70 percent. Freightliner expects 2004 sales to top $10 billion, up from $9.2 billion last year.

Business has been so good that, according to Kear, some managers have received at least two bonuses this year — some totaling $60,000. “They sit across the bargaining table wanting concessions from us, but it’s our concessions that bought the new cars and trucks they have parked in the parking lot.”

Union officials said the company has back-orders at every facility in the U.S. and Mexico. Hillesland told the Labor Press that had the contract been ratified, Freightliner planned to hire an additional 500 workers before year’s end. Now, he fears the plant could shutter. “The thought has always existed — and Freightliner has said — that a prolonged strike could cause the company to relocate,” Hillesland acknowledged.

Union officials said the company sent trailers to the Portland facility last week to dismantle machinery and load equipment for transport to other Freightliner facilities.

“Our members build a beautiful product,” Hillesland said. “It takes a lot of hard work and talent to accomplish their tasks. A few years ago, the company had gotten themselves into financial trouble and asked our members to help them. We cooperated by accepting wage concessions and reducing our benefits package, a total sacrifice of nearly 20 percent of our compensation. Our sacrifices were far greater than the 5 percent wage cuts that management took. Despite our efforts, we still saw hundreds of our members laid off. Today, the company is healthy again and we expect to properly share in their successful turnaround.”

The Portland plant produces Freightliner, Western Star and military vehicles for the Daimler Chrysler Heavy Truck product.

Freightliner, a subsidiary of German automaker DaimlerChrysler AG, employs 3,000 in Portland, including nearly 2,000 at its corporate headquarters. It has more than 14,000 employees nationwide.

© Oregon Labor Press Publishing Co. Inc.