Thursday, July 28, 2011
Back to the drawing board...
Spirit's first offer was overwhelmingly rejected: 96.5% of the 700+ members casting ballots voted "NO." I hope now the Company might believe us that this really wasn't the "fair and equitable" contract they've been saying it is.
-- Bill, who couldn't get 96% of people to agree on what day it is...
Tuesday, July 26, 2011
This little piggy went to "market," Part 2…
"It's nice that you want to tell a story and all, Bill, with all the detail you can think of but we're just two days until the vote and at the rate you're going you won't be finished until Labor Day, so can you just get to the damn point?!"
Okay, okay, okay…
The point is this: the Company says they want to provide the WTPU workforce with market-based pay and benefits but their offer to us little to do so.
Medical benefits: The only place they come close. The "market" appears to be pretty much paying at least 20% of costs and I would say a gradual increase to that goal is quite reasonable.
Pension benefits: The "Additional Contribution / Transitional Contribution" scheme we currently have may provide a relatively equitable pension payout for those of us "old-timers" who had a lot of years with Boeing and are close to retirement. But for my middle-aged coworkers and, especially, the young newhires, the small percentage 401(k) payment received annually is no where near close to the guaranteed pensions given by virtually every other airplane manufacturer in Wichita.
Salaries and Incentives: And this is where they really lost me. Spirit says they want to keep us at a salary slightly below market -- 97%, to be exact -- and then give us Incentive Plan bonuses that would give us a slightly-above average annual wage in years the company has just average performance of a 1.0 "target" and a significant bonus in years we do really well. Annual raises pools would be tied directly to agreed-to market data. All of which would be fine, except their offer doesn't do that.
- Spirit has offered an Incentive Plan that would pay out only 3% for the first half of the contract. Now, I may have forgotten most of my elementary school arithmetic but my addition of 97 + 3 equals only 100% of market and not the "slightly above market" that the company says we deserve
- Not only that, Spirit wants to limit the market-based raise pools to an arbitrary 3%. This means that even if the average raise pools across the industry market were, say, 3.9% each year1, we would only receive 3%, losing 9/10ths for the year and dropping us below the 97% at which the company says we should be maintained. Coupled with the Company's plan to cut those raise pools even deeper, should we not make the annual performance targets, and we could lose almost 2% to market every year of the contract.
All we've been asking for is that the company live up to its stated values of providing the market-based wages and benefits we deserve and, until they do, I will recommend and vote NO to their contract offers.
-- Bill, who's glad to see two of his favorite Tool Designers, John and Ron, sign up just to vote this sucker down. Now that you're here, we hope you stick around...
Notes:
1 - Salary increase estimates for the next decade range from 3.5% to 4.2%. In my example, I used the Congressional Budget Office estimates for 2012 – 2021 which project real average wage growth for the next decade to be 3.9%: 1.4 % (pg 74) over the projected inflation rate of 2.5% (page 24)
Monday, July 25, 2011
Fixed that for you...
My pal Debbie Logsdon asked me if I'd be willing to help clarify Spirit's Frequently Asked Questions About the Contract, so here are the Company's answers in a shorter, more precise version…
If the Company wants to pay us at Market, why are caps included in the proposal?
There are caps because the Company is concerned that there may, perhaps, might be some wild, unrealistic market fluctuation that would spike salaries. How that unrealistic fluctuation could possibly happen using the SIRS High Tech Composite data -- which averages dozens of job codes across hundreds of companies -- well… what's the next question?
Can’t these drive us below market?
LA-LA-LA-LA-LA! I CAN'T HEAR YOU!
Why does the Company proposal set the Performance Bonus percentages below that received by other employees?
The Incentive Plan percentages are only lower than that received by all other salaried employees, like management and engineers. The Incentive Plans for the IAM, IBEW, and UAW are lower than the WTPU's because they all have an additional "Gain Share" bonus plan to make up for it,.
It looks like the proposed contract offer freezes salaries at their present level through January 31, 2021. Does this mean there will be no raises for ten years?
As there are no minimum guaranteed raises, it means that individual employees could receive no raises for ten years.
The Union has told me there is a plan to hire NC programmers as contract labor to work at home and that the contract would let the Company lay me off, but continue to use the contract labor. Is this true?
Blah, blah, blah, blah… Yes.
Can you show us the data from the SIRS report that will be used to set the SELA Fund?
No, but we will be sharing it with WTPU leadership prior to fund identification.
Why is the $2,000 payment after ratification an advance on the Performance Bonus payment for 2012?
Because we'd prefer to pay you with your own money.
-- Bill, who thinks the Company needs to re-do their Compensation video, this time addressing the salary adjustment pool maximum "caps"…
Sunday, July 24, 2011
This little piggy went to "market," Part 1…
Much like Spirit's other goals for (1) a long-term contract, (2) flexibility to react to emergent business conditions, and (4) a medical plan that brings us into line with our other coworkers, our negotiation team also had little philosophical disagreement with Spirit's
Goal 3 : Align compensation with market and business performance, while providing baseline protection.
Okay... I'll admit that our team's initial proposal was pretty much in line with the Spirit negotiators' claim that "the traditional approach in labor negotiations is that often the parties agree to fixed wage pools without regard to economic circumstance at the time of the adjustment." We started off with an initial proposal for fixed, salary adjustment pools -- identical to that we had during our last contract -- with the idea of continuing to be willing to risk losing out on bigger salary increases in really good years, for protections during the really bad (of which we've had a few during the last contract). But the "market-based" plan Spirit presented to us was worth considering.
The company's stated "compensation philosophy" is pretty simple and straightforward. Spirit would like its employees to start with a base salary slightly less than the market average for our jobs... 97% of market in our case. But it also includes an incentive bonus plan, where employees would earn slightly above market when Spirit performs to normal business expectations -- and earn significantly above market when we, as a Company, excel. This makes good sense to everyone involved: it protects Spirit during downturns, when our competitors can pay lower wages, and incentivizes and pays us "above average" wages when we do the job we're supposed to do.
Unfortunately, that stated philosophy was put to lie with Spirit's contract offer and what the company wanted us to accept wouldn't keep us at the "slightly below wages / slightly above bonus" plan they said they wanted.
The first potential roadblock to accepting this plan was the price we were to pay to get into it: forgoing any "selective salary adjustment" raise pool for this year. I, for one, had little problem understanding the company's intent here: after six years of guaranteed 3.5% raises -- while the economy tanked and our neighbors were getting laid off and unrepresented coworkers were getting nothing for raises -- I could easily believe Spirit's market data that indicated we were, on average, at 101% of market (ignoring, for the moment, the dubious claim that our Technical Designers are at 139%, throwing off that average) and passing on an expected 3.5% raise would drop us down to right around the "97%-of-market" where Spirit said they wanted us to be.
The roadblock with the lack of a raise wasn't about our average rate, however, it was that we have a significant number of coworkers who, even with the guaranteed pools over the past six years, still remain well below market. (And, to pre-empt any claim about under-performers who don't deserve a raise, several of these below-market coworkers have Performance ratings of "Exceed" or "Exceptional.")
So while the team was willing to pay for this "slightly below wages / slightly above bonus" plan with this year's raise -- as every other union had in the past -- we needed something to take care of our coworkers who remain well below market and proposed a counter-offer to do just that. Which, along with corrections to the incentive and salary caps we requested, the company proceeded to ignore.
(to be continued)
-- Bill, who'd hope the reasons listed thus far would be enough to convince you to reject the contract…
Thursday, July 21, 2011
"But we're giving you just what you asked for…"
On Wednesday the Spirit Management negotiation team -- who, in the interest of full disclosure, I must admit many I've worked for and whom I like and respect, personally -- sent out their opinion of their contract offer, much as we did on Tuesday. Little that was stated in the Company's message differed much from our critique, in content, at least, if not in form. But I was struck by one statement -- The Company approached these negotiations with four goals – all were directly related to the need to keep the Company healthy and our team for the future intact… We shared these goals with the Union team, and in all of our efforts kept coming back to them as we worked through various proposals -- and the implication that the SPEEA Team was, somehow, unreceptive to those goals. That was hardly the case, so, to clarify…
Goal 1 : Ensure stability for our customers and competitiveness of the unit, through an enhanced partnership with a long-term agreement
We surveyed our members prior to negotiations and found that, almost unanimously, they would not accept the ten-year contract duration given to the IAM, IBEW, and UAW. Digging a little deeper, however, we realized that what our coworkers were saying was that they wouldn't accept the ten-year contract to which the other units agreed. So it wasn't the duration, itself, that was the problem, it was the wage, benefit, and job security structures within those agreements that were the issues; given sufficient protections, my coworkers could live with the long-term agreement that Spirit said they desired. So when the Company countered our initial offer of a 3-year agreement with a 10-year agreement, our negotiations team was more than willing to discuss and agree to a mutual goal of a long-term contract, provided the protections were in place that would assure our members wouldn't suffer unreasonable impacts.
Goal 2 : Maintain the flexibility required to uphold a healthy business that aligns with the production cycles and productivity challenges
The SPEEA WTPU Negotiation Team isn't as clueless or as blind as some might lead you to believe. Among the five of us, we have well over a century of experience in this industry and have lived through more "business cycles" and "productivity challenges" than half the population on the face of the Earth would ever experience. We understand that customers can be fickle and cancel contracts for which we've already started work. We are quite aware that "exogenous" events, like 9/11 or an avian flu, can disrupt and cancel delivery of our contracted products. So we had not much problem in granting the Company additional flexibility to ride out these unplanned events: we were willing to accept changes to our current contract language that would allow the Company additional leeway in exercising the temporary layoffs and short workweeks that would get us through those unforeseen disruptive times and allow Spirit to meet their stated intent of keeping "our team for the future intact."
Unfortunately, that significant concession wasn't quite enough for Company negotiators: they also demanded the right to keep outside contractors -- hardly what we would believe to be "our team" -- fully employed, denying that work to our members, suggesting that we be those who take the economic "hit" during the bad times, instead of the contractors who were allegedly hired to fill in the gaps. Our negotiations team was unwilling to put those outsiders ahead of "our team," so the temporary layoff and short workweek provisions remain as limited as they were in our last contract. But let's be clear that it was the Company's decision, not ours.
Goal 3 : Align compensation with market and business performance, while providing baseline protection
Here's where the biggest conflict arises, so I'll leave discussion of this until after I explain why the negotiations team also had little problem with…
Goal 4 : Provide Health Care options that align with the needs of the membership as well as supporting the realities of the economic conditions through the life of the contract
The Negotiation Team understands Spirit's need to maintain standard medical coverage for its workforce and we had no problem accepting the few changes to coverage that the company requested to bring us in line with the rest of Spirit's employees.
We did push back on the company's initial proposal to immediately increase our portion of the medical insurance premiums from 10% of cost to 20%. Not that we had a significant problem with the 20%; we do our own research and understand what the healthcare market is today and a 20% premium during the next decade is quite reasonable. We objected to only the immediate implementation of the increase and we proposed a gradual implementation of a 20% premium with a 2% increase per year until 2016, which the company accepted and placed in their final offer.
We also proposed caps on those premiums that equaled to a growth of 7% per year. We believed that to be quite reasonable, considering that the growth Spirit's seen over the past 6 years was right around 3%. The company, however, was not interested in caps.
At least not any caps that would benefit us…
(to be continued)
-- Bill, who apologizes in advance for his "unprofessional" sense of humor…
