THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, February 8, 1995 TAG: 9502080454
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 75 lines
The blue-collar union at Newport News Shipbuilding approved a four-year wage freeze and other concessions Tuesday to help secure their jobs by making the yard more competitive.
The contract was ratified by more than a 3-to-1 margin despite the wage freeze as well as the loss of two of 12 holidays and 10 percent of vacation time.
Local 8888 of the United Steelworkers of America had threatened to strike, but backed off when the yard stopped seeking wage cuts. Members approved the contract 2,271 to 627 in polling that ran from 5 a.m. Monday until 1 a.m. Tuesday. About 41 percent of the union's 7,000 members voted.
It's the first contract at the shipyard in which management and labor have pledged to work together closely to improve productivity.
The success of the program is critical to the shipyard's future, said William P. Fricks, the shipyard's president and chief operating officer.
The shipyard had been seeking wage cuts of up to $2.50 an hour to help it land commercial contracts to take up the slack from declining orders from the Navy, its principal customer of the past 16 years. It gave up that demand after being convinced of the union's willingness to help boost productivity.
Under the new contract, labor and management will form committees focused on improving productivity and efficiency and cutting costs.
``This concept underscores the value and importance of labor and management working together to help make the shipyard more competitive,'' said Judy Boyd, the union's subdistrict director and chief negotiator.
Fricks called the move to boost productivity risky.
``If we don't offset the difference, we won't be able to land new contracts,'' he said.
Wage cuts will be an issue again in the next round of contract talks if the shipyard and labor don't produce the needed productivity gains, Fricks added.
All 12,500 hourly laborers at the shipyard are covered by the contract, which expires April 4, 1999. About 5,500 of the workers don't belong to the union.
In exchange for the wage freeze, the shipyard agreed to give workers three bonuses over the life of the contract and improved health care, pension benefits and seniority rights.
``This 50-month agreement will provide Newport News Shipbuilding employees and their families with much-needed improvements in medical and increased pensions,'' Boyd said. ``Also, the three bonuses will give families added, and I'm sure needed, income over the life of the contract.''
A 5 percent ratification bonus will be paid as soon as possible to hourly employees on the payroll as of Monday. The bonus will be based on an employee's annual income given a regular 40-hour week.
A 4 percent bonus will be paid in 1996, and a 3 percent bonus is due in 1997.
The contract also increases the job security of senior workers and provides a health care package with lower deductibles and out-of-pocket expenses that is also less costly to the shipyard.
``It's a better deal for us and the employees,'' Fricks said.
It is the first contract between the shipyard and the Steelworkers that doesn't include a wage hike. The workers' last wage hike came under the recently expired contract in December 1993. That contract was approved by a 9-to-1 margin and included a 14 percent wage hike and $1,000 in cash bonuses.
The new contract does raise the highest wage for an hourly worker by $1, to $15.53 an hour.
Approval of the contract marks the conclusion of tense negotiations between the yard's management and the union, which had been threatening a strike if the yard persisted in its demand for wage cuts.
``Although these were tough negotiations, the bargaining atmosphere was positive,'' Boyd said. ``The company was responsive to the union's needs and concerns.''
Fricks characterized the talks as ``very difficult.'' by CNB