July 20, 2007 Volume 108 Number 14

Machinists ratify three-year contract at Freightliner

Members of Machinists Lodge 1005 ended a week-long strike at Freightliner July 9 by ratifying a new three-year contract that includes successor and severance language should the company sell or close down. The vote to accept was 461-153.

Machinists walked off the job and set up picket lines at 12:01 a.m. July 3 after rejecting a proposal 331-224 that phased-out company-paid supplemental health insurance at age 65 for some workers, and added 10 hours a month of mandatory weekday overtime, if needed.

The rejected contract offer also included a wage increase of 9 percent ($1.70 an hour) over three years, a pension hike of 60 cents an hour over three years, a $1,000 ratification bonus, a reduction in co-payments for health insurance premiums, and a “gainsharing” program in which employees could receive quarterly bonuses (ranging from $100 to $400) if they met quality and productivity benchmarks.

There was no job security or severance language in the first contract proposal.

Lodge 1005 represents 717 of the 1,000 unionized employees at the Swan Island manufacturing facility in North Portland. The other workers are represented by Teamsters Local 305, Service Employees Local 49 and Painters and Allied Trades Council 5. The unions bargain and vote as a coalition, but their contracts are separate for each craft.

Members of the three other unions approved their contracts on the first vote. All three unions honored the Machinists’ picket line.

Three days into the strike, the union still hadn’t heard from management, so late on the afternoon of July 6, Joe Kear, a business agent for Machinists District Lodge 24 and the chief negotiator, called the company. The sides met that evening and by midnight had hammered out what Freightliner described as its “last, best and final offer.”

“We tried to work on the two major issues (that led to the strike), but made no progress,” Kear told the NW Labor Press. “So we progressed to other issues.”

Job security has been high on the list of concerns. Kear said the union has been trying for decades to get severance language in one of its contracts. So, when the company agreed to successor and severance language the bargaining committee agreed to take it back to the membership (with the previous rejected offer intact) for a vote.

A successor clause will protect workers if the Western Star brand is sold — meaning the union contract will be enforceable at a new company. If the plant were to shut down, there is language whereby the company pledges to negotiate in good faith a severance package.

“Good-faith” was a key issue among the striking machinists.

“They’ve beaten the ‘give-a-crap’ out of us,” Wayne Poe, a 14-year employee told the Labor Press July 5 while walking a picket line on North Basin Road.

“It’s been concession after concession after concession,” added Carl Pollack, a 24-year employee. “It was time to step up and take a stand.”

The last time workers struck Freightliner was June 1970. Then, the unions bargained separately. The strike, which lasted three months, began with the Painters Union and spread from there. At the time, the Labor Press reported 751 Machinists, 111 Teamsters and 55 Painters were on strike. Union officials said the dispute wasn’t so much about money, but more about working conditions.

Machinists nearly struck again in 2004. They rejected an initial offer, but held off picketing because of a scheduled summer maintenance shutdown. The second proposal passed by just three votes.

Prior to that, in 1999, workers agreed to a one-year contract extension and in 2001 they agreed to open their contract after the company pleaded poverty. In that contract, workers accepted a $2 an hour pay cut, relinquished a $1,500 signing bonus and agreed to start co-paying some of their medical insurance.

“We gave it back to keep the company going,” Pollack told the Labor Press on July 5. “And they promised us that our sacrifice would never be forgotten.”

Six months after the concession vote, Freightliner shut down its parts plant, laying off around 600 employees.

Earlier this year, Freightliner moved production of its signature-brand truck from Portland to North Carolina and Mexico, resulting in the layoff of more than 800 employees.

Freightliner is a subsidiary of German automaker DaimlerChrysler AG. The Portland facility manufactures an average of 38 Western Star brand and military trucks at the plant each day. No trucks were produced during the strike.

“It’s been tough, but we got a hell of a lot in this contract,” said Kear, who was employed at Freightliner before being elected business agent. “I don’t think we’ve ever had so many improvements in one contract.”

Machinists will receive a 70-cent- an-hour raise immediately, followed by 50 cents an hour July 1, 2008, and another 50 cents an hour July 1, 2009. The starting wage at Freightliner is $14 an hour. Top scale at the the plant now is $22.25.

Freightliner contributes $3.95 an hour to a defined benefit pension plan. Under the new contract, that will increase by 10 cents an hour every six months for the next three years.

Long-term employees receive company-paid medical insurance until age 65. Until this contract, Freightliner paid for supplemental medical insurance to Medicare. Under the terms of the new agreement, employees who are at least 50 and have 20 years or more of service on July 1, 2010 will continue to receive the supplement. Employees who will be less than 50 years of age and have less than 20 years of service on July 1, 2010, will maintain health care coverage and retiree medical benefits until they turn 65. Once Medicare kicks in, no supplemental coverage will be provided.

About half the workforce will lose the supplement.

The union also was able to get Freightliner to reduce current monthly out-of-pocket payments for health insurance premiums. The old rate for single, two-person and family coverage was $40, $90 and $130, respectively. The new monthly rate is $25, $55 and $80, respectively.

On the issue of mandatory overtime, Freightliner must first give 24 hours notice and, with assistance from a shop steward, find volunteers. If volunteers run short, overtime will be mandated by seniority — even if the least senior employee isn’t qualified to do the job.

“If the person is untrained, the company will have to train them,” Kear said. “They won’t use this.”

The mandatory overtime language is for weekdays only.

NOTE: A new unit of 14 pre-delivery inspectors, members of Lodge 1005, unanimously ratified their first contract in voting that took place July 10. Terms are similar to those approved by Machinists who manufacture trucks, following their week-long strike.

The new union members gained a union pension, with Freightliner contributing $3.95 an hour to a defined benefit plan. They will receive wage increases, a structured promotion system, seven additional sick days and six additional holidays. Eight temporary employees will become eligible for permanent hire and will be covered under the agreement.