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Changes to pensions at issue

By Brad Bauer bbauer@mariettatimes.com

The average age of the 290 striking Eramet Marietta workers is 50. About a quarter of the union force is within a few years of retirement.

It helps explain how proposed changes in pension plans and retiree medical costs has led to picket lines forming outside the Ohio 7 plant, just south of Marietta.

“The way we figure it, in nine years every bit of our retirees’ pensions will be ate up by their share of medical costs,” said Jim Deem, local steelworkers union president.

Ethan Frank-Collins, human resources manager at Eramet, said the claim was far-fetched and maintains the plant offered its “best, last and final” contract on Aug. 24, which was turned down by the union on Saturday.

“It’s a mistake to consider the inflation rates of just the past few years and extend it out that far,” Frank-Collins said. “The rates should level off.”

The company also plans to freeze pension plans, leaving employees the option of enrolling in a modified benefit plan of $30 per month for each year of service (plus what the worker has accumulated through the end of 2006), or workers can opt into a 401(k) plan with a dollar for dollar match, up to 5 percent.

Eramet officials say the concessions in medical costs and retirement are necessary to ensure the long-term viability of the plant. The specialty metal plant has operated for more than 50 years in Marietta under different ownership.

The labor dispute at Eramet is the first since 1985, when members of the Oil, Chemical and Atomic workers walked off their jobs for three weeks. At that time, the company was owned by Elkem. Eramet, a French-owned company, took control of the plant in 1999.

Deem said about 70 workers are nearing retirement age at the plant. Most other workers have been at the plant for at least 15 to 20 years.

“Most guys have been here 20 years or more and are relying on their pension,” Deem said. “They don’t have the time to put into a 401(k) and get anything out of it.”

The steelworkers offered Saturday to continue working under their existing contract, in hopes negotiations could continue. Their old contract expired at 11:59 p.m. Saturday.

Eramet officials said extending contract talks would “only delay the inevitable,” and mobilized a workforce of salaried employees and contracted specialty workers to continue with production.

The average Eramet union worker earns $19.53 per hour. The company proposed a pay increase of $1.71 per hour over the life of the next three-year contract.

Deem said workers had hoped for more, considering the record profits the plant posted since the last contract, in addition to rising fuel and utility costs at home.

Eramet Marietta’s “last, best and final offer” fact sheet:


Each employee has a one-time opportunity to select between two choices for a pension plan.

The first option is to freeze the existing hourly employee pension plan and replace it with a modified Defined Benefit plan that offers a flat dollar benefit of $30 per month for each year of service after Jan. 1, 2007.

This would mean an employee who retires in 2017 will receive a monthly pension check based on the benefit earned in their pension plan through Dec. 31, 2006, as well as $300, which they earned under the modified pension system for 10 years of service.

The second option is to freeze the existing plan, and instead of a flat-dollar pension plan, increase the company match in a 401(k) plan from 3 percent to 5 percent.

Under this option, the company would increase its current 401(k) match from 50-cents for each dollar up to 5 percent to match employee contributions dollar for dollar up to 5 percent.

Retiree medical:

The proposed change is to cap the company’s share of retiree medical costs at $839.62 per month for family PPO coverage, beginning Jan. 1, 2007.

Currently, the total cost for retiree family PPO coverage is $1,119.50. Eramet pays $727.50, leaving former workers to pay $392.

Incentive plan:

The company introduced a performance-based incentive plan that has the potential to pay out a total of $800,000 to hourly employees over the life of a three-year contract.

It equals a potential bonus of $2,500 per employee.

Pay increases:

The company proposed a pay increase of $1.71 per employee over the life of the contract.

Currently, the average worker earns $19.53 per hour.

Other incentives:

Eramet also offered increases in shift premiums, overtime lunch programs, and safety equipment allowances.

Source: Eramet Marietta.




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