USW, ContiTech reach ‘fair' labor pact

FAIRLAWN, Ohio—Shaped in part by the current labor market, a new contract was reached June 28 between approximately 600 workers with the United Steelworkers union and ContiTech USA Inc.

The 38-month agreement, which saw improvements in wage scale, retirement plans and time-to-eligibility for health insurance, was passed by a three-to-one margin, according to ContiTech.

The pact begins Aug. 1 and expires Sept. 30, 2025. The current labor contract, reached in 2017 between the USW and ContiTech, expires July 31.

"Given the market today, we are satisfied with the outcome of the master contract negotiations," Jessica Belback, head of human relations for ContiTech U.S. and Canada, told Rubber News. "With the collaborative and transparent relationship we have with union leadership, we had a good idea of the main topics the union would want to discuss in these master contract negotiations.

"Some of these topics overlapped with what the company needed in order to make our locations more attractive to workers in the local labor markets."

The contract affects workers across three locations, including Lincoln, Neb. (260 union employees, 360 overall); Marysville, Ohio (180 union employees, 220 overall); and Sun Prairie, Wis. (145 union employees, 180 overall).

The Lincoln location produces power transmission belts and hoses for the agriculture and automotive aftermarket industries, while the Marysville plant makes industrial conveyor belts.

Sun Prairie produces air conditioning and transmission fluid hoses for the automotive industry.

"I can tell you I have been doing this contract work since 2012 and this was a contract that was agreeable to both sides," said Emil Ramirez, USW District 11 director. "The gains we made, and keeping health care where it is ... the company recognized that during COVID, these employees showed up everyday.

"We were just looking for a fair contract."

According to a draft of the contract provided by the USW, cost-of-living adjustments provided by a formula in the previous contract remained as-is moving in to the next three-plus years.

"We think COLA has paid off, as the last quarter we will see another $1.02. ... We were happy to keep the formula where it's at," Ramirez told Rubber News.

In July, the COLA increase will have topped out at $5.39 per hour "which has kept pace with inflation, even over the last year," the summary draft states.

"We expect inflation to continue to slow down, but whatever the trend is over the next three years, keeping the COLA language will allow us to keep pace," union bargaining advocated to members in the draft.

New contract language also ensures an opportunity for a 3-percent wage increase each year of the new contract, assuming the cost-of-living increase is less than that.

For instance, if COLA adds up to an equivalent of a 2-percent wage increase, workers will receive an additional 1-percent increase. Conversely, if COLA adds up to an equivalent of a 3.5-percent wage increase, there would be no additional half-percent increase on Aug. 1.

"We got the minimum general wage increase of 3 percent (each year)," Ramirez said. "The company has acknowledged that we are doing pretty good ... and this is a contract where we were able to make some gains."

Ramirez said the union had hoped to negotiate general wage increases of between 4.5 and 5 percent per year.

"That is what we were hoping for, but 3 percent is fine," Ramirez said.

On the retirement side, union workers at ContiTech have two types of plans—pensions for those hired prior to 2017, and 401(k) plans for those hired after 2017, Ramirez said.

While the new contract increases the pension multiplier by $3, from $60 to $63, Ramirez noted that union negotiators had hoped to see it bumped up $5 to $65.

This means that upon retirement, the annual pension payment (essentially for those ContiTech workers with more seniority) will be their years of service multiplied by $63.

"There are a lot of high-seniority people in these plants," Ramirez said. "We were hoping to get (them) a pension bump so they can retire in the coming years—which they did (receive)."

On the 401(k) side, Ramirez said the union was "really looking for something in the 5-percent range," however, a 3-percent bump was negotiated.

For employees hired on or after Sept. 1, 2017, the 401(k) auto contribution rate will increase from 2 percent to 3 percent of a worker's compensation; and the 401(k) match will increase from a maximum of 2 percent to 3 percent of compensation.

For instance, if an employee hired on or after Sept. 1, 2017, voluntarily defers 3 percent of their pay into their 401(k), the company will match 100 percent of that contribution at 3 percent, plus the 3-percent auto contribution, for a total company contribution of 6 percent.

In addition to these overall gains, a $1,500 ratification bonus was negotiated (per worker) in the new contract.

As evidence of the agreeable negotiations, the master contract was ratified by both sides ahead of schedule.

"Both parties were trying to get something finished early. ... Both sides outlined their goals and that the company has been profitable," Ramirez said. "We are facing some major inflation factors right now ... I think for the sake of our customers, we wanted to make sure that we got an agreement completed, so each side pursued this quickly."

Union contract negotiations typically take into account cost-of-living adjustments and strive to incorporate fair wage increases.

As a sign of the times, this contract incorporated trends in the overall labor market—namely the high number of open jobs in the manufacturing sector.

As such, both ContiTech and USW District 11 placed a premium in the new contract on changes that benefit hiring and retainment.

"We increased our starting wage for new hires and reduced the amount of time that it would take the new-hire employees to reach top rate by 50 percent," Belback said.

Previously a 6-year wage progression, the wage scale in the new contract was reduced to three years.

"If we are going to try to retain employees, six years is too long, especially during this COVID crunch," Ramirez said. "This allowed people to reach the top of their wage scale in 36 months. ... This was a big thing for us."

In addition, a new hire now can receive a week of vacation time after 60 days, considered their probationary period.

"We added vacation (time) for new hires and reduced the eligibility waiting period for health and welfare benefits for new hires," Belback said.

Under the new contract, new employees are eligible for health insurance after 31 days, as opposed to 90 days.

"We are pleased to come to a quick and fair agreement for our workers," said Rick Ledsinger, head of labor relations for Continental. "The well-being of our employees is a top priority for us. We are grateful to work side-by-side with the USW and look forward to continuing to provide great products and service for our customers."

Employees at the three facilities are represented by USW Locals 843L (Marysville, Ohio), 286L (Lincoln, Neb.) and 904L (Sun Prairie, Wis.).

"Our bargaining committee negotiated wage, pension and benefit improvements without sacrificing the security of our jobs or our union," Ramirez said. "The hard work and dedication of our membership has been rewarded with a fair contract."