the film
Economic and dam related articles

Alcoa Plant Operators
Prepare for Worst-Case Scenario

by Brent Adams
Business First of Louisville, May 26, 2006

As plant managers of two local Alcoa Inc. plants met with United Steelworkers of America officials to discuss a new contract, members of their management team were busy learning new positions.

Alcoa's extruded automotive products plant at 4301 Produce Road and Reynolds Wrap aluminum foil production plant at 2827 Hale Ave. are among 15 Alcoa plants nationwide that are governed by a contract that expires May 31.

The five-year agreement covers 9,000 members of the United Steelworkers, said Kevin Lowery, director of corporate communications for Pittsburgh-based Alcoa.

Although Alcoa officials are hopeful a new agreement can be reached, they aren't taking any chances, Lowery said. Earlier this month, the union locals voted to authorize the union's negotiating committee to call a strike if talks,

which began May 18 in St. Louis, break down.

"It's prudent to be prepared in the event we do not reach an agreement," Lowery said. "If there is a strike, we plan to run the plants -- maybe not at 100 percent, but as much as we can."

Union Local 155 president Jack Coates was in St. Louis for negotiations and could not be reached for comment.

Salaried, temp workers might be used
In the event of a steelworkers strike, Alcoa will call on salaried employees and, in some instances, temporary workers to carry out production duties, Lowery said.

Alcoa is even prepared to mobilize workers from corporate offices in Pittsburgh and New York City to fill production positions, Lowery said.

"If there is a strike, we want to ensure that there is a business for workers to come back to once it's over," Lowery said. "Because once that work leaves, it isn't easy to get it back."

Union unhappy with Alcoa proposals
The United Steelworkers union has expressed displeasure over proposed changes to its master agreement. Alcoa has proposed changes to benefits for new hires and retirees. It also has proposed continuation of outsourcing of some work at the plants.

But none of the points has been more controversial than proposed changes to the workers' and retirees' health insurance plans.

Alcoa-union dispute involves four areas of benefits, hiring processes
Areas of difference between Alcoa and the United Steelworkers center largely around four areas: a proposal for workers to pay a portion of their health insurance premiums; a proposal for retirees to pay a greater share of their premiums; a proposed reduction in benefits for new hires; and the question of which jobs may be outsourced.

Union members would pay part of premiums
Alcoa has asked workers to pay a portion of their health insurance premiums. The company has previously paid the entire premiums.

Under the proposal, union employees would be covered under Alcoa's Select Benefits plan. Employees enrolled in the plan pay graduated amounts based on the amount of coverage they select.

Premiums would cost as much as $250 a month by 2009, the union said.

On, a Steel?workers Web site devoted to the negotiations, the union said: "We believe that the health of union members and our families should not depend on our ability to pay. We are all union members, and we should all be in the same plan with the same benefits."

But Alcoa contends that it needs union employees to pick up part of the tab for health insurance costs to help the company keep its expenses down and keep the prices it charges consumers in line.

Lowery said that the 9,000 employees affected by this contract are Alcoa's only U.S. employees who do not pay a portion of their health insurance costs.

The remaining 36,000 hourly and salaried employees, including 11 plants represented by the Steelworkers, pay for a portion of their coverage.

"We spend hundreds of millions of dollars on health care every year," Lowery said, adding that Alcoa is trying to sell the union workers on the idea of consumerism.

"When someone contributes to their coverage, then consumerism behavior takes over and they become better purchasers of health care," Lowery said. "All of our preventative care is 100 percent covered. We want our employees to be healthy and make informed health care decisions."

Health care would cost retirees more
In past contracts, Alcoa and the Steel?workers agreed that retirees would pay an increasing share of health insurance costs.

A 2001 agreement stipulated that in 2007 and subsequent years, Alcoa would not pay any more for retiree medical benefits than it did in 2006. As costs increase, the difference will be incurred by the retirees, Lowery said.

Although it agreed to the language, the union now wants Alcoa to consider paying a larger portion of retirees' premiums.

The union estimates that a non-Medicare retiree and spouse would pay nearly $550 a month by 2012 and more than $1,000 a month by 2015.

During the current negotiations, Alcoa has proposed implementing a health insurance plan that would allow retirees to pay lower premiums by tailoring a benefits package that would meet their individual needs, Lowery said.

New hires may receive less

Alcoa proposed reducing benefits for new hires to allow the company to hold the line on benefit costs. The union argues that the plan would leave new employees with more expensive health insurance, less vacation pay, no pension plan and no retiree health insurance.

"A two-tier system divides us, and our strength is in our unity," the union said on the Web site. "The result of that division would be less ability to protect union members in both tiers from further losses."

Lowery noted that the company spends an average of $41 an hour in pay and benefits to each of its U.S. employees.

"We're sensitive to their concerns," Lowery said. "But these are real costs."

In an effort to maintain costs, Alcoa proposes offering new employees participation in a 401(k) plan rather than a pension. It also would require them to pay a portion of their health insurance premium.

Flexibility in outsourcing at issue
Job outsourcing, which has been an issue in various industries, also has been a point of contention during these talks.

Alcoa wants the flexibility to continue hiring outside contractors to perform various tasks at the 15 plants. The union acknowledges that outsourcing is justified in some instances, but it contends that Alcoa outsources some jobs that could be done by union workers.

The union is seeking greater input concerning which jobs can be outsourced.

Lowery declined to say which production tasks currently are outsourced, but he said outsourcing does not replace union jobs, as the union claims.

Many of the tasks the company outsources are nonproduction tasks such as janitorial duties, cutting grass and shoveling snow.

"We don't see it as being an issue," Lowery said. "We feel like we have the right to do it. When you're paying $41 an hour, you have to think long and hard, does it make sense to pay that much to have someone cutting grass?"

Unions affected by Alcoa Inc. contract discussions
United Steelworkers of America locals affected by master contract negotiations:

Louisville Alcoa facilities

Only the Produce Road and Hale Avenue plants are affected by the labor negotiations.

Brent Adams
Alcoa Plant Operators Prepare for Worst-Case Scenario
Business First of Louisville, May 26, 2006

See what you can learn

learn more on topics covered in the film
see the video
read the script
learn the songs
discussion forum
salmon animation