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Union Urges Mead To Reject Kaiser’s Offer Trentwood Local Recommends Workers Approve Contract

Fri., Jan. 13, 1995

A top Steelworkers official at Kaiser Aluminum & Chemical Corp.’s Mead smelter says the possibility of a strike against Kaiser is “closer than it’s ever been.”

Officers of United Steelworkers of America Local 329 on Thursday asked the more than 1,000 employees they represent at Mead to reject the four-year contract tentatively agreed to by Kaiser and the union last week.

“We’re gearing up for a strike at this point,” Steve Sims, Local 329’s grievance committee chairman, said Thursday as Local 329 President Jerry Miller talked with angry members at the union’s office.

However, across town at Kaiser’s Trentwood rolling mill, Joe Thorp, president of Steelworkers Local 338, is leading his membership in the opposite direction.

“We have recommended to our members that they vote for the contract,” Thorp said Thursday.

Thorp said he felt it was inappropriate to discuss the reasons Local 338’s executive board decided to recommend passage to the local’s more than 1,100 members.

One factor, though, may be a vast restructuring program at Trentwood during the past two years in which old labor-management lines have been blurred. As a result, fundamental interests of Trentwood employees may differ in some aspects from those of Steelworkers at Kaiser facilities that continue to operate under more traditional structures.

So now, the members must vote.

Ballots will be mailed to individual union members’ homes, and local union officials do not expect to know the results until mid-February.

“If the contract is rejected,” Sims said, “then within 24 hours, we’ll be out the gate unless the company comes back to the table with a better offer.”

That would place workers at Spokane’s largest manufacturing employer on strike.

The contract covers 3,000 Kaiser employees at Trentwood, Mead, a smelter in Tacoma, an alumina refinery at Gramercy, La., and a rod and bar plant at Newark, Ohio. Sims said the presidents of the Tacoma, Gramercy and Newark locals indicated last week their initial reaction was to recommend against passage.

But with more than two-thirds of those Steelworkers employed at Mead and Trentwood, Kaiser’s Spokane employees have an enormous influence on the ultimate outcome of the contract ratification vote and whether they all go on strike next month.

Kaiser representative Susan Ashe would not comment, explaining, “We have an agreement with the Steelworkers International not to communicate any information regarding the agreement until after the ratification vote.”

Under the current contract, Steelworkers at Mead make a base wage ranging between $11 and $13.40 an hour. Most fall in the $12 to $12.35 an hour range. That base wage is supplemented by a cost-of-living allowance and a fund tied to the world price of aluminum.

Local 329 leaders view the proposed contract as concessionary.

They say the new proposal calls for a four-year contract that would pay an additional 25 cents an hour on the base wage beginning in November, and another 25 cents in November, 1997. That’s half the increase that was included in the previous four-year contract.

The new contract calls for a onetime signing bonus of $200. The previous contract included $2,000 in signing bonuses over the life of the contract.

Under the old contract the Steelworkers received additional money based on the price of aluminum. When the price dropped below 58 cents a pound, they received nothing. Above that price, they were compensated on a sliding scale that peaked at $2 an hour when the metal price hit 81 cents a pound.

The new contract would convert 58 cents an hour of that money into an hourly increase the Steelworkers get despite the price of the metal. It raise the price to 64 cents before the metals price bonus kicks in. The bonus would not hit $2 an hour until the price hits 94 cents a pound.

Pension benefit increases fall slightly below those of the previous contract, they say, and the cost of living allowance and medical benefits are eroded.

“But the biggest issue as far as the strike would go,” said Sims, “would be the changes they want in the letter of understanding” - a “check and balance system” that limits the company’s ability to arbitrarily change job assignments or consolidate jobs.

In the new contract proposal, Sims said, changes are made in the letter of understanding that would give the company more leeway to change and combine job assignments.

“Under those changes,” he said, “we think we could lose up to 100 jobs at Mead during the coming year.”

The job loss through restructuring and consolidation that Mead union leaders fear in the proposed contract, though, has already occurred at Trentwood.

In a sharp departure from its traditional management approach during the past two years, Kaiser has given its employees more influence over and responsibility for plant operations and productivity. The company and union together designed a reorganization of the rolling mill that eliminated 70 management and 300 union jobs and increased both quality and productivity. Under the agreement, the company will match productivity gains with a capital investment program designed to ensure the long-term future of the plant.

In any case, the contract proposal is so complex that whether it ultimately represents concessions to the company, a standstill, or an overall gain for the union depends on a range of issues, including how metal prices and inflation unfold over the life of the contract.

Given those complexities, combined with the volatile period of history Kaiser and the Steelworkers have been through over the past decade, it is not surprising that the company’s two largest union locals are taking divergent stances on this contract.

During the past 10 years, Kaiser has twice been on the verge of bankruptcy. It was the subject of a hostile takeover in 1988 that left the company saddled with a stifling burden of debt. It earned record profits in the late 1980s, suffered through an unprecedented depression in aluminum prices, and now appears headed toward another cycle of profit.

In some of the bleakest times during that period, the Steelworkers have ridden to the company’s rescue.

During the recession of 1983 the Steelworkers accepted a wage freeze and sacrificed benefits. In 1985, they granted more concessions amounting to about $4.50 an hour. In 1988, they recouped about $3.50 in wages and benefits. And the gains they made during the last contract negotiations in 1990, they say, still didn’t return them to their pre-1983 level.

Last year, the two sides began negotiating Oct 12. They were unable to reach agreement by the time the contract expired Oct. 31. A strike was averted when they agreed to an extension of the old contract. Talks resumed in November and on Jan. 5, the tentative contract agreement was announced.

xxxx What’s next? Steelworkers will receive ballots by mail; the union expects to know results by mid-February.

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