Fifty-eight percent of Cessna Aircraft’s union workers voted to reject a contract offer by the Wichita-based OEM but ended up returning to work rather than hit the picket line.
After the majority of union workers rejected the proposed contract on September 18, members were asked to vote whether to strike. The strike vote failed to win a two-thirds majority, so the contract offering was accepted by default. In a town where close to 15,000 aerospace workers have been laid off in the past 18 months, 49 percent of the 2,400 union members at Cessna voted to strike.
Cessna expressed satisfaction with the final vote. “We are satisfied to begin this next week [of September 19] with a new contract in place so we can move forward with our efforts to reshape Cessna to be more competitive in a global market and a tough economy,” said Cessna chairman, president and CEO Jack Pelton. He concluded, “We presented the members a contract that was more than fair, given our business environment.”
As listed by Cessna, key elements of the seven-year contract include:
• a ratification bonus of $2,500 paid in January.
• a lump-sum payment of $1,000 in January 2012.
• a general wage increase of one percent in years five through seven.
• wages augmented with performance-based bonus opportunities after the first year of the contract.
• annual cost-of-living increases through the life of the contract.
• transition to the consumer-based medical, dental and vision plans used by Cessna’s non-bargaining unit employees.
• an increase in Cessna’s contribution to the existing defined pension plan.
When first presented with the contract on September 13, the union leadership described it as “ugly.” Machinists District 70 directing business representative Steve Rooney said Cessna “chose to use the economic downturn as an opportunity to gut the [existing] contract and saddle employees with extreme and punitive measures.”
Among the most objectionable aspects of the contract, according to the union leadership, is its inclusion of “no wage increases for the first four years for anyone and no increases for 25 percent of the membership.” The union also noted that while Cessna proposed a “performance pay” system, it would be directed exclusively by management, “which may never pay a dime.”
It also criticized the “gutting” of the traditional healthcare plan, replacing it with “a consumer-driven plan that raises premiums by as much as 160 percent and will cost members $5,000 a year before coverage finally kicks in.”
With the Cessna contract settled, however acrimoniously, the union can put its full energies into equally contentious contract negotiations with another Wichita OEM, Hawker Beechcraft.
Hawker has made it obvious that among the possible cost-cutting measures is a shifting of jobs away from the main facilities in Wichita. According to chairman and CEO Bill Boisture, to remain competitive, the company is [considering] a number of possibilities, [including] exploring other locations both within and outside the U.S.
