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.