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About Northwest labor press. (Portland , Ore.) 1987-current | View Entire Issue (March 2, 2007)
Freightliner counts down to mass layoff at Swan Island By DON McINTOSH Associate Editor The last Freightliner truck ever to be made in Portland will roll off a Swan Island assembly line March 29, at which point 802 local union workers will lose family-wage jobs. In all, 632 members of Machinists Local 1005, 65 members of Painters Local 1094, 94 members of Teamsters Local 305 and 11 members of Service Employees Local 49 will be laid off March 30, with no expectation of re- call. German-based Daimler-Chrysler, which owns Freightliner, will continue to manufacture Western Star brand trucks at the Portland plant, so about 900 union jobs will remain. But as of April 1, Freightliner, a brand begun by Portland trucking mag- nate Leland James, will be made only at plants in North Carolina and Mex- ico. Nearly 1,200 workers are also be- ing laid off at the Cleveland, North Carolina, plant (a little under a third of the work force there), but are being told to expect recall when demand re- turns for Freightliner trucks. In recent years, demand has risen and fallen in time with progressively stricter emissions standards imposed by the Environmental Protection Agency (EPA) as part of its mandate to enforce the Clean Air Act. Before each new technology is in- troduced, trucking companies, cautious about increased cost or decreased relia- bility, engage in a buying binge. They “buy ahead” before the new model year kicks in. Then the new truck comes out, demand drops, and workers are laid off. In this case, the EPA standards for 2007 call for a 90 percent reduction in particulate matter, the ultrafine soot that can be seen coming out of exhaust pipes, which is linked to cancer, bron- chitis and increased heart disease. In the past, truck-makers were able to meet federal emissions standards for diesel trucks by making changes within the engine compartment, like altering the shape of the cylinder, or improving fuel-metering. But to get to the new level, engine manufacturers have to treat tailpipe emissions, burning the particles and running exhaust through a catalytic converter for the first time. The device uses platinum and rhodium, rare metals, and will render U.S.-made diesel engines the cleanest in the world, as clean as vehicles that run on natural gas. Freightliner has boasted that emissions from the new trucks will be so reduced that a white handker- chief placed over the exhaust pipes of a running truck will come off clean. The problem is the new trucks are $5,000 to $10,000 more expensive, and have a modest drop in fuel economy — about 2 percent. The EPA allowed truck-makers to manufacture the old model year through the end of the first quarter of 2007. Freightliner plants are running at ca- pacity until then. After that, demand drops dramatically. Joe Kear, a business agent at Ma- chinists District Lodge 24, says the company is using that slack time to ex- ecute an unrelated business decision — shifting production to Mexico, where it’s cheaper, and North Carolina, where it’s closer to suppliers and customers. Last December, Freightliner an- nounced the construction of a new $300 million facility in Saltillo, Mex- ico which will make up to 30,000 Freightliner and Sterling trucks a year starting in early 2009. That’s when the next buying spree is expected, because EPA standards on nitrogen oxide emis- sions ramp up the following year. The Machinists Union saw that coming, and last year was able to get the government to certify Freightliner layoffs as “trade-related.” That means any workers the company lays off through the end of 2008 will get much more generous job retraining assis- tance from the government. Those ben- efits include employment counseling, up to two years of unemployment ben- efits, a two-thirds health insurance sub- sidy through COBRA, tuition reim- bursement for up to two years of trade school or technical education, a wage T HE M ARCO C ONSULTING G ROUP Daimler-Chrysler decision ends 60-year track record of truck-making in Portland subsidy to give employers incentive to hire them and provide on-the-job train- ing, and job search and relocation ben- efits to enable workers to move to take jobs for which they’re qualified. At a recent meeting explaining these benefits, one worker asked if the relocation benefits could be used to move to Mexico. The answer: “No.” Under NAFTA, only jobs can freely cross borders, not workers. As mass layoffs go, this one isn’t as bad as it could have been. Over half the workforce will remain to produce Western Star brand trucks, so union seniority rules apply to the layoff. That means the laid-off workers are a rela- tively young group — most in their 20s and 30s. They’ll have many years of work ahead and will be better able to take advantage of retraining benefits than workers in their 50s. And other employers are lining up to offer jobs to the laid-off workers. A “Transition Team” made up of unions, management, non-profits and govern- ment agencies is meeting weekly to sew together a safety net before the layoffs occur. Thus far, they’ve lined up 80 employers to take part in a massive jobs fair in late March. As of press time they were looking to rent space in the Rose Quarter for the event, which would also be open to the family mem- bers of laid off workers. Kear said welders, painters and workers doing body repair have obvi- ous and sellable skills, while others have hidden talents. Some assemblers are actually diesel mechanics — skills they weren’t using. Meanwhile, Team- sters classified as material handlers know how to do inventory control, op- erate forklifts, and manage shipping and receiving, so some of their work experience may qualify them for jobs elsewhere. However, no amount of optimism can eliminate the sting of losing a good union job with excellent fringe bene- fits. Wages in the Machinist contract start at $12 an hour and top out at $20.55 after four-and-a-half years. The maximum unemployment insurance benefit will be $445 a week. Adding to the sting for some is the fact that they agreed to a pay cut in 2001 in a deal to keep the plant open. “People feel betrayed,” said Frank Rouse, president of Local 1005 and a chief steward at Freightliner. “They put in all this time for the company, and now they’re getting laid off.” Swanson, Thomas &Coon ATTORNEYS AT LAW Since 1981 James Coon Jacqueline Jacobson Ray Thomas Kimberly Tucker Margaret Weddell Cynthia F. 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