Different Bonus Pay Plans Cause Friction

(For the record, Friday, February 3, 1995:) Workers at Kaiser Aluminum & Chemical Corp.’s Trentwood rolling mill received a gain-sharing bonus of $2.25 an hour during the fourth quarter. A story in Thursday’s business section incorrectly reported the gain-sharing bonus rate.

One of the key reasons union leadership at Kaiser’s Mead and Trentwood plants view their proposed labor agreement so differently is a basic difference in the way union workers at the two plants receive bonus compensation.

Under terms of the last contract, Kaiser employees could choose on a plant-byplant basis between a bonus package tied directly to the world price of aluminum, or a “gain-sharing” bonus that is tied to a combination of aluminum prices, plant profitability and plant productivity.

Trentwood chose gain sharing. Mead chose the metal price bonus.

According to Robert Petris, United Steelworkers of America’s District 38 director, at current metal prices, Mead workers get an additional $2 per hour. But during much of the last contract, metal prices were so low that they got nothing.

During the last quarter, Petris added, Trentwood workers got $3.17 an hour over their base wage under gain sharing.

Ray Milchovich, Kaiser’s vice president of flat-rolled products, says one result of the gain-sharing bonus system is to focus management and labor under the same set of incentives.

“The compensation system Trentwood will have in place, assuming we get this labor agreement behind us, will be conceptually identical for every person in management on down to the last person on the floor,” Milchovich said last week. “So what causes me to be rewarded will cause every person who works there to be rewarded.”

Mead Works Manager Dave Kjos has been frustrated by the Mead workers’ unwillingness to shift to the gain-sharing bonus model.

“Their rejection of (the gainsharing option) cut off some of their potential,” said Kjos. “We’ve offered about four different versions so far at Mead, and had no luck yet. But we will continue to work on it.”

Steve Sims, grievance committee chairman for Steelworkers Local 329, though, says Mead workers haven’t been offered as attractive a gainsharing package as Trentwood workers.

“There’s a lot of variables there,” said Sims. “We’ve been presented some gain sharing-profit sharing programs, but ours are calculated differently because we are a different operation.”

At the close of negotiations over the current contract proposal, Sims said, Kaiser initially cut back the Trentwood gain-sharing package. But at the last minute, he said the package was sweetened to make it more palatable.

“But they never gave Mead the opportunity to look at that package,” he charged.