Union wins retraining benefits — over Freightliner’s objection

Three days before Christmas 2005, Freightliner LLC laid off 130 workers at its Portland truck-making plant. The company expected workers would get unemployment benefits for a bit, and then would be recalled when production picked up.

Freightliner didn’t expect that one of its unions would apply to the government for retraining benefits. But that’s what one union did. At the advice of Bob Tackett at Labor’s Community Service Agency, AFL-CIO, Machinists District Lodge 24 representative Joe Kear petitioned the U.S. Department of Labor to certify that a trade-related layoff had occurred.

Kear saw work moving to a Freightliner plant in Santiago Tianguistenco — an industrial park near Mexico City. And he knew that any U.S. workers displaced by it have a right to government-paid career counseling and retraining, thanks to a sweetener added to get members of Congress to approve the North American Free Trade Agreement (NAFTA).

Usually, companies cooperate with such requests for worker benefits. Freightliner, a subsidiary of German-owned DaimlerChrysler Corp., disagreed with the premise that the layoffs were trade-related and asked Kear to withdraw the petition.

Kear kept going. A Labor Department investigator sided with the union.

Right now, no Freightliner workers are actually using the benefits. All of the laid-off workers were recalled and are back at work.

But Kear is thinking ahead. Labor Department certification means the workers are entitled to benefits for any layoffs that occur up to two years afterward — through April 6, 2008. And Kear thinks production will drop at the beginning of 2007. More stringent federal requirements on vehicle emissions will take effect then, with the result that the company’s 2007 truck line will be more expensive, get lower fuel economy and require a higher, more expensive grade of diesel.

That means truck buyers are likely to prefer the 2006 line, and may balk at the 2007 model.

If layoffs occur at that point, workers would get the retraining benefits with no delay. It’s no substitute for keeping a high-paid union manufacturing job, but it’s a pretty generous package: Job counseling; up to two years’ unemployment insurance benefits; a health care tax credit that pays two-thirds the cost of COBRA health insurance; a moving allowance if the worker needs to relocate to get a job; and up to $20,000 to pay for school or up to $10,000 in wage subsidy to employers willing to do on-the-job training.

Machinists are the largest of four unions at Freightliner’s Portland plant. But Teamster drivers, Service Employees janitors, and Painters and Allied Trades painters will also be eligible for benefits if laid off. So will non-union employees or managers.

For now, the plant is up and running, with 1,700 union employees turning out trucks on Swan Island in Portland.

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