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About Northwest labor press. (Portland , Ore.) 1987-current | View Entire Issue (Dec. 15, 2017)
NORTHWEST LABOR PRESS | December 15 , 2017 | PAGE 25 RETIREMENT Daimler Trucks withdraws from Machinists pension But workers, and even the pen- sion plan, could come out ahead Daimler Trucks North America is exiting the union pension plan for assembly workers at its Swan Island truck plant. On Nov. 4, members of Ma- chinists Lodge 1005 at the truck plant and a nearby facility that customizes trucks pre-delivery voted overwhelmingly in favor of Daimler’s mid-contract offer to put money — lots of it — into a “defined contribution” 401(k) retirement savings plan spon- sored by the national Machinists union, as a replacement for the money it has up to now been putting into a multi-employer “defined benefit” pension plan. Normally, switching from a pension to a 401(k) wouldn’t be a great trade, because a tradi- tional defined benefit pension offers a guaranteed benefit and therefore greater security. But the Seattle-based Automotive Machinists Pension Plan was pushed into long-term decline by the 2008 financial crash. As of Jan. 1, 2017, it had $648 million in assets and $1.1 billion in pro- jected future liabilities. It might have been possible to make up for those losses if Daim- ler, the pension plan’s biggest par- ticipating employer, hadn’t spent decades downsizing. Now, with many more retirees in the plan than active members, catching up is a heavy lift. At its Portland facilities, where Local 1005 members assemble eral rules, the amount of its with- and customize heavy-duty West- drawal liability is calculated us- ern Star brand trucks, Daimler ing a 10-year “lookback period,” has been paying a mandatory “re- and the plant downsized in 2005. habilitation” surcharge of $6.15 Going forward, the company an hour to make up for the multi- will contribute $3.50 an hour employer pension plan’s financial into the 401(k), and those ac- losses. And that’s on top of the counts will be seeded with a $4.45 an hour that the com- pany agreed to contribute un- ““We felt they were sincere in wanting to der the current do something for employees to have a collective bar- replacement for the retirement plan.” gaining agree- — Joe Kear, retired business representative, ment with Ma- Machinists District Lodge W24 chinists Lodge 1005. What’s more, because of the plan’s fi- nancial difficulties, those base start-up contribution of $15,000 contributions weren’t accruing per employee. Daimler is de- much in terms of future pension positing the seed money not just benefits: The plan’s 1 percent for the roughly 380 workers cur- “multiplier” means when work- rently employed but also for ers retire, they’ll get monthly pay- about 55 employees who are laid ments equal to 1 percent of each off but still have recall rights to year’s total contributions. During return to work if the plant starts the plan’s glory days before the hiring again. The seed contribu- 2001 financial crash, the multi- tions total around $6.6 million. plier was 5.35 percent. Under the agreement workers Under a 2006 federal law, if ratified, Daimler’s automatic Daimler wants to withdraw from hourly contribution drops to $2 the pension plan, it must pay the an hour in October 2020 for the unfunded liability for its em- final year of the current union ployees who are in the plan, in contract, but the company at that order to ensure that they get the point will also provide a dollar- benefits they already earned. for-dollar match of worker con- The actual dollar amount is con- tributions up to 1 percent of an sidered private information be- employee’s base wage. tween the pension trust and the While $3.50 an hour toward company. One factor in the com- the 401(k) is less than the $4.45 pany’s decision to withdraw now an hour base rate Daimler was may have been that under fed- contributing to the pension, Ma- chinists District Lodge W24 rep- resentative Dwain Panian says when the seed money is factored in, it works out to about $5 an hour over the life of the contract. Workers will bear the risk of investments doing poorly in the 401(k), but based on calculations by union repre- sentatives, it’s likely to gener- ate a greater re- tirement benefit than remaining in the defined benefit plan — because of the low multiplier. It wasn’t a shock that Daimler wanted out of the pen- sion: In the five-year union con- tract that the two sides agreed to last year, Local 1005 gave the company the right to withdraw from the pension, so long as the union would have an opportu- nity to present proposals. Daim- ler lived up to those terms, says retired District W24 business representative Joe Kear. On Oct. 23, Daimler notified pension plan trustees that it planned to withdraw as of Nov. 30, 2017, and began discussions with the union. Kear, who retired earlier this year, helped Panian with ne- gotiations, which lasted four days. “We felt they were sincere in wanting to do something for em- ployees to have a replacement for the retirement plan,” Kear said. The union tried to interest Daimler in starting a new de- fined benefit plan, but that was a non-starter. At a special Nov. 4 meeting at the Jantzen Beach Red Lion, members voted by a 97 percent margin to approve the com- pany’s proposal to begin con- tributing to the Machinists 401(k). The fact that Daimler will be paying a large withdrawal liabil- ity puts the pension in better shape for retirees and partici- pants at the remaining employ- ers, Kear says. Kear says this also resolves one of thorniest issues in recent bargaining: the degree to which the company was on the hook for making up pension losses. Pension rehabilitation obliga- tions have been a sore point, constraining the company’s abil- ity to offer wage increases. Panian says the new settle- ment may have other benefits as well: It lowers labor costs at the Portland truck plant, making the plant’s long-term survival more likely. In 2009, Daimler consid- ered closing the plant, but de- cided against it. Machinists are the largest of four union bargaining units at the Portland truck plant, and the deal worked out doesn’t affect the other units: Teamsters Local 305, Sign Painters & Paint Mak- ers Local 1094, and Service Em- ployees International Union Lo- cal 49. ...New Seasons deploys union-busters From Page 1 ings, but New Seasons workers interviewed for this article said they weren’t told the meetings were optional, or even what the meetings were about. In communications with em- ployees, New Seasons fre- quently touts its “speak-up” cul- ture. But Amanda Birnbaum — a 14-year New Seasons em- ployee who works as a cashier at the Concordia store — says she was shushed when she spoke up to defend the union campaign at one of the meet- ings led by a Cruz & Associates consultant. “We’re becoming the com- pany we say we’re not like,” Birnbaum told the Labor Press. When Birnbaum asked why union advocates weren’t also given a chance to speak at these “informational” meetings, she says she was told if New Sea- sons let union organizers ad- dress workers, that would be supporting the union, which employers are barred from do- ing. [Not true.] New Seasons now publicly acknowledges that it hired the firm Cruz & Associates. A new section of the company website — newseasonsmarket.com/ laborrelations — says the firm was hired to provide “voluntary information sessions to offer objective information to our staff.” In Birnbaum’s recollection, the information presented was that unions are “manipulative” “third parties” with their own agendas, chiefly collecting dues. On its website, Cruz & Asso- ciates bills itself as “one of the nation’s leading labor relations firms” and says it helps busi- nesses “respond immediately and effectively to union activ- ity” by managing campaigns, preparing campaign materials, and training managers and su- pervisors. Past clients include the trucking company Conway, window manufacturer Jeld- Wen, Hilton hotels, American Apparel, and Trump Hotel Las Vegas. That’s the company New Seasons is now keeping, and it’s not likely to improve the public image of the up-to-now fast- growing Portland natural foods chain. On Dec. 7, New Seasons Workers United announced that some New Seasons employees have filed a complaint with the nonprofit that certified New Seasons as a “B Corp.” B Corp is a certification provided by the nonprofit B Lab that a company uses its business as a “force for good.” In their complaint to B Lab, the workers say New Sea- sons management has violated employees’ right to organize. They call on B Lab to investi- gate New Seasons compliance with its stated values, and if found in violation, to strip the company of its B Corp designa- tion. New Seasons, on its website, says it hasn’t retaliated against staff, or asked employees to re- frain from discussing the union- ization effort. And indeed, Men- doza was ostensibly fired for creating a hostile work environ- ment, and Bosart was fired for lateness. [Bosart says that’s af- ter she was put on six months probation for missing an op- tional on-the-clock “disman- tling racism” class that she signed up for.] SUPPORT RALLY ANNOUNCED FOR NEW SEASONS WORKERS UNION ■ Time: Tuesday, Dec. 19, 4 p.m. ■ Place: Arbor Lodge New Seasons store, 6400 N Interstate Ave.
