Posted: July 10, 2013 | Tags: Momentive
Workers at Momentive, the global chemical manufacturer, have a new contract. The agreement covers employees at two sites, in upstate New York and Ohio. This was the first labor agreement negotiated since a contentious fight over benefits and pay, resolved in 2010 over the objections of some workers at the Waterford, N.Y., plant.
The contract was won by a 9-vote margin, with 357 workers voting for the agreement and 348 against.
The union and Momentive “worked hard during negotiations to find a balance between what is competitive in the marketplace and what meets employee needs,” John Dandolph, president of Momentive's Silicones and Quartz Division, said in a statement. “We believe the result was a fair and equitable agreement, and we now know that our employees agree.”
Not all workers do agree, as the tight vote indicates. Three locals voted on the contract: one in Ohio, and two in Waterford. This year, as in 2010, workers in Waterford's IUE-CWA Local 81359, the biggest of the three, rejected the proposal. But workers at the other two locals carried the deal through, just as they did three years ago.
“We did vote this down again,” says Dominick Patrignani, president of Local 81359. “And we voted it down by a substantial margin. Just not enough.”
Labor conflict is not new to Momentive's workers in Waterford. The plant, which makes silicones used in caulks, gaskets, carpets, bedding and cosmetics, used to be part of General Electric, and was sold to private equity firm Apollo Global Management in 2007. The company, renamed Momentive, initially carried on with the generous contract left over from GE, only to cut wages with little notice, in violation of the labor agreement. After an investigation by the National Labor Relations Board, Momentive reinstated the workers' lost earnings. That back pay, however, was granted in exchange for deep wage cuts going forward, as part of a deal signed in 2010.
The wage cuts and contract fight left the plant tense, many workers said, as we reported in a two-part series last year.
“After the devastation of 2010, here they come again,” says John Phelps, a long-time Momentive worker who retired earlier this year, and who remains active in the union.
The new contract offers a first-year bonus of $1,000, and a 2 percent annual raise in the second and third years of the contract, according to workers and the union. But it also increases worker contributions to health care while raising their deductible. Retired workers are affected by the health care changes because they participate in the employee health plan until they reach Medicare eligibility. Momentive spokesman John Kompa says the contract gives workers “essentially the same health care benefit plan as other associates within the company.”
The contract also eliminates defined benefit pensions for workers under 50, putting them instead into a 401(k) plan. The company's pension plan is underfunded by $87 million, according to Momentive's 2012 annual report. Workers older than 50 and with more than 10 years of service at the plant can keep the current plan, but that cutoff leaves out some employees at the plant for decades.
“There's people with 25, 26 years of service, and their only fault is that they started working here too young,” Patrignani says. One long-time worker will turn 50 in the first week of January, just past the line to keep the old retirement benefit, Patrignani says. “He misses it by a few days.”
Phelps knows that the company is in a financial bind, carrying more than $3 billion in debt. But, he says, workers are earning $14 an hour for jobs that used to pay $30, and it's hard on them and their families.
“People are tired of it,” Phelps says.
The debt load hasn't impeded increases in management salaries. John Dandolph, the new head of the silicones and quartz division, was paid almost $775,000 in 2012, including a $100,000 sign-on bonus for his promotion to that role, according to Momentive's annual report. Craig Morrison, Momentive's CEO, received a 5 percent pay hike in July 2012, bringing his base salary to more than $1 million. Other executives got bumps of between 4 and 5 percent.
One long-time employee, close to retirement, says that cuts to hourly workers' pay and the tension at the plant are taking a toll. In the upheaval of 2010, his wage was cut by nearly a third.
“I didn't mind going to work the other 35 years, but now it's getting to be a chore,” he says, speaking on condition of anonymity for fear of reprisals. He noted, as did other workers contacted for this piece, that despite the lower wages, pension changes, and health care costs, the employees at Momentive are still doing better than most other people. Many of the workers in Waterford don't have advanced degrees; the average wage for Americans with only a high school education is just $652 a week, far less than what Momentive workers take home. But, several workers said, the job used to provide a solid, stable, middle-class living. No longer.
“This is happening more and more in this country, to a lot of people,” the worker said. “And I don't see it getting any better.”