Article

May 2013

Profiles of significant collective bargaining disputes of 2012

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Lockheed Martin Corporation and the Inter-national Association of Machinists Local 776

The second-largest work stoppage that began in 2012 involved production and maintenance employees of the International Association of Machinists Local 776 and occurred at three separate locations: the fighter jet plant of Lockheed Martin Corporation in Fort Worth, Texas; Edwards Air Force Base in California; and the Naval Air Station Patuxent River in Maryland. The 48-working-day strike began on April 23, 2012, and ended on June 28, 2012, accruing 172,800 lost workdays. The 3,600 union members went on strike over proposed changes in health benefits and a Lockheed Martin plan to stop offering a traditional pension to newly hired workers. The union rejected the initial offer, saying that it “would have raised health care costs and eliminated pensions for new hires.”16

The strike ended on June 28, 2012, with the union agreeing to terminate the company pension benefits for new hires and instead provide a 401(k) type of retirement savings plan. “Union officials feared that if the new hires did not have traditional pensions, they would not support keeping the pensions for the current workers,” said one media source.17

The new agreement maintained the traditional defined-benefit pension plan for current workers and increased monthly retirement pension benefits by 14 percent.18 The company extended the contract to a fourth year, with pay raises totaling 11 percent over the 4 years.19 Lockheed Martin also agreed to add a health insurance option covering out-of-network services.20

According to Mark Blondin, the union’s vice president, the federal mediator had advised the union that, although the new offer would leave “both sides with issues they [felt] were not completely resolved, the machinist negotiating committee recommended the offer to members as the best that [could] be achieved without a much longer work stoppage.”21

Key provisions of the new agreement include an immediate 3-percent increase in base pay, with raises of 2.5 percent in each of 2013 and 2014, and 3 percent in 2015, and a signing bonus of $2,000, down from $3,000 in the original offer.22In addition, the agreement calls for an upfront cost-of-living payment of $1,600, half of which would otherwise have been paid in 2013.23 Workers also may take a $1,800 lump sum instead of the first-year wage increase and may elect to receive 2 weeks of previously earned vacation pay to help recoup wages lost during the strike.24

Another new contract provision is the addition of a health plan option with lower deductibles and lower out-of-pocket costs, a key change that union leaders describe as a substantial improvement for many workers.25

Consolidated Edison and the Utility Workers Union of America Local 1-2

The third-largest work stoppage that began in 2012 was a lockout of the employees of Consolidated Edison (Con Ed) Company of New York, the electric utility serving that city’s metropolitan area. The lockout, involving 8,000 members of the Utility Workers of America Local 1-2, began on July 1, 2012, and ended 18 working days later, on July 26, 2012. All told, 144,000 days of idleness were accrued.

Notes

16 Angela K. Brown, “Lockheed machinists OK new labor deal, end strike,” Bloomberg Businessweek, June 28, 2012, http://www.businessweek.com/ap/2012-06-28/lockheed-martin-machinists-approve-new-labor-deal.

17 Bob Cox, “Lockheed Martin union votes to return to work,” Fort Worth Star–Telegram, June 27, 2012, http://www.star-telegram.com/2012/06/27/v-print/4064348/decision-day-for-striking-lockheed.html.

18 Christopher Drew, “Machinists at Lockheed to vote on agreement to end a strike,” Business Day, The New York Times, June 24, 2012, http://www.nytimes.com/2012/06/25/business/lockheed-martin-and-machinists-reach-agreement.html.

19 Ibid.

20 Ibid.

21 Cox, “Lockheed Martin union votes.”

22 Ibid.

23 Ibid.

24 Ibid.

25 Ibid.

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About the Author

Elizabeth A. Ashack
Ashack.Elizabeth@bls.gov

Elizabeth A. Ashack is an economist in the Division of Compensation Data Analysis and Planning, Office of Compensation and Working Conditions, Bureau of Labor Statistics.