Electrical contract bans movement of operations Essay

In the electrical equipment industry, Allen-Bradley Co. and the
United Electrical Workers agreed on a 3-year contract that included a
ban on moving any operations out of Milwaukee through 1987. Another
provision designed to protect the earnings of workers allows laid-off
workers with recall rights to be reimbursed for 75 percent of tuition
expenses for retraining, up to $500 per year. About 1,000 workers are
currently eligible for this benefit.

Instead of wage increases, the active employees will receive four
lump-sum payments over the term. The first was $200 payable
immediately. The other three, payable in December of each year, will
equal 3 percent of each worker’s wage rate multiplied by the hours
worked in the previous 12 months. According to the union, the average
wage rate is $10.55. The automatic cost-of-living pay adjustment
formula was revised by providing that in both the first and second years
the formula will operate only if the Consumer Price Index rises 4
percent. If it does, adjustments will be calculated at the existing
rate of 1 cent an hour for each additional 0.2-percent rise in the
index. There is no “corridor” in the third year.

In a move to open jobs to laid-off workers, the accord provides
that employees age 58 or older retiring during the balance of 1984 will
receive an extra $450 a month until age 62. Those 61-1/2 years or older
will be guaranteed 6 months of payments.

To minimize premium cost increases for Blue Cross medical coverage,
employees will now pay deductible and coinsurance costs. Employees also
will be permitted to select from among five other types of health
insurance which, the union claimed, offer superior coverage and built-in
cost controls.


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