OFS Bargaining Report #22

OFS Bargaining Report – Day 20

Bargaining Report for Local 3263 & Local 1365

Bargaining Report for Monday, June 5, 2006:  During the first meeting with the Company, Bill Bates distributed three additional letters from CWA President Larry Cohen to Qwest, Bell South and AT&T in support of the OFS product line.  Today Bill reminded the Company that if the Union doesn't get an agreement, we can as easily stop such support.  Clem acknowledged the Union's position.

Bill then passed to the Company a copy of the Union's research on Furukawa showing they are an extremely strong cash-rich Company, also showing that OFS came from the brink of bankruptcy some three years ago to a point of near profitability.  Bill advised the Company that only the production employees, our members, could have brought the Company back from destruction in such a short time, and now we expect some reward and recognition for such hard work.

Bill advised the Company that the major holdup to the current bargaining is health care costs and, to a certain degree, pensions.  He advised the Company that Furukawa knew their investment and knew their would-be debt associated with retiree and employee health care, and they walked into the investment with their eyes wide open; this is the time for Furukawa to accept those legacy costs and take responsibility for them.  Bill advised the Company that the Union has every intent to continue to bargain in good faith and to work toward reaching a fair and equitable agreement, but the Company and Furukawa's refusal to take responsibility for their debt is making it exceedingly difficult.  He advised the Company that, if we are forced to go to battle over any part of the Agreement, then Furukawa will become a part of that battle and we will drag them into that battle on a global basis – they will not be excused from their refusal to take responsibility for their US employees.

One of the Company's bargaining team members told Bill that when Furukawa purchased OFS there were no retirees; all the current debt due to retirees has accrued since the purchase.  Bill advised the Company that Furukawa certainly was aware of the future debt that would be associated with the purchase, which they indicated by the fact that they insisted on moving the VEBA account over with the purchase.  Now it is time for them to take full responsibility for their acquisition, especially considering the Company has not put one penny into the VEBA account.

Bill passed a letter to the Company advising them that the Union expects the Company to honor one of their employee's request for reasonable accommodations for part-time hours.  Clem advised Bill the Company would review the letter and report back to the Union.

The Company passed their latest counter for Retiree Health Care.  The Company advised the Union that they are about as close to a best final proposal on Retiree Health as they can get.  The Company's proposal did reduce premiums somewhat for the first year from their last proposal, but increased premiums for the second and third year over their last proposal.  Though the Company did drop the premiums across the boards for Retiree Catastrophic Plan, the premium costs still run between $175 to $860 a month from 2007 through 2009.  Though the Company continues to offer proposals that move in the right direction, their first proposal on retiree health had a high of over $1,900 a month in premiums compared to today's in which the high is a little less than $1,000 a month for premiums.  But the premiums would still consume as much as two-thirds of the average retiree's pension.  And, in the year 2009 the high-end premium cost will absorb nearly 100% of the average retiree's pension.

Bill asked the Company what the cost savings to the Company would be as children aged and dropped off retirees' health care plans.  The Company will work those numbers and report back to the Union.

Bill advised the Company the Union understands the Company's last proposal, but the numbers still don't get us where we have to be.  Bill advised Clem to take the Union's position and concern back to whomever he has to at Furukawa and let them know we are serious about our concern and position.  Clem told Bill he would do that.

The Company passed their counter on pensions.  The Company rejected the Union's proposal for pension band increases.  The Company agreed to the Union proposal that all CWA represented employees would have their pension benefits vested immediately at time of conversion to Cash Balance Accounts (CBA).  The Company agreed to the Union proposal on vesting of CBA accounts so that vesting will start at 2 years of service and step in to 100% vested in the 5th year of service rather than the current plan which is vested at 5 years.  The Company rejected the Union proposal to allow employees with 15 years or more service the option to take a lump sum or traditional annuity at retirement.  The Company advised the Union the pension plan is currently approximately 83% funded.

To address the Union's concern, the Company added a provision that increases the 401K match from 80% to 100% with a $6,000 annual cap.

The Company passed their counter to the National Step Grievance proposal.  The Union has some concerns that the Company wants to limit grievances heard at that step to just National Contract Interpretation grievances, rather than all grievances.  The Union advised the Company we would take their counter under advisement.

Clem advised Bill the Company is still working on processing the Union's request for information.

~Tough As Nails – Solid As Bricks – We Want A Contract In 2006~