Big teachers union charged in pension rip-off

A lawsuit filed last week in federal court in Washington State contends that the National Education Association breached its duty to members by accepting millions of dollars in payments from two financial firms whose high-cost investments it recommended to members in an association-sponsored retirement plan. The case was filed on behalf of two N.E.A. members who had invested in annuities sold by Nationwide Life Insurance Company and the Security Benefit Group. It contends that by actively endorsing these products, which carry high fees, the N.E.A., through its N.E.A. Member Benefits subsidiary, took on the role of a retirement plan sponsor, which must put its members’ interests ahead of its own.

By taking fees from the two companies whose annuities N.E.A. Member Benefits recommended to its members, the N.E.A. breached its duty to them, the suit contends. The N.E.A. is the nation’s largest professional organization; its Web site says it serves 3.2 million workers in education, from preschool to university graduate programs.

The suit reflects heightened concern among retirement plan participants that excessive fees are diminishing their savings and enriching financial services firms. Last November, the General Accountability Office published a study concluding that retirement plan participants, as well as the Labor Department, needed clearer information on fees in these investment vehicles.

Lawyers representing the plaintiffs said they had been unable to calculate the total payments received by N.E.A. officials from Nationwide and Security Benefit since 1991, when the products were first endorsed by the organization. But a recent Security Benefit prospectus indicated that fees paid to N.E.A. Member Benefits might exceed $2 million a year. That prospectus said Security Benefit paid the N.E.A. subsidiary $510,000 a quarter.

The suit, filed in United States District Court for the Western District of Washington at Tacoma, said that such payments were not disclosed to N.E.A. plan participants. Instead, N.E.A. Member Benefits maintained that it selected Nationwide and Security Benefit based on competitive criteria, the suit said.

Lisa M. Sotir, general counsel to N.E.A. Member Benefits, declined to comment on the lawsuit, saying that she had not yet seen it.

Michel Cole, a spokeswoman for Security Benefit, said it was against the firm’s policy to comment on pending litigation. Erica Lewis, a spokeswoman for Nationwide, said company officials could not comment until they had seen the complaint.

Lawsuits on behalf of pensioners are usually brought under the Employee Retirement Income Security Act of 1974, known as Erisa, which requires organizations overseeing retirement plans to put their beneficiaries’ interests first.

The type of 403(b) programs at issue in the complaint are typically exempt from Erisa. But the lawyers bringing the case argued that because the N.E.A. actively promoted the annuity products to its members, it essentially stepped in as a plan sponsor. That made it subject to Erisa’s fiduciary duty requirements, the lawsuit contended.

“The Erisa exemption applies to situations where the employer does nothing more than arrange for salary deferral for its employees,” said Derek W. Loeser, a lawyer at Keller Rohrback in Seattle, which represents the plaintiffs in the case. “But in endorsed plans, the union together with the insurance company are taking over the role that the plan sponsor plays.”

From 1991 to 2000, Nationwide was the exclusive N.E.A. plan provider. The company sold its N.E.A. Valuebuilder accounts, with more than $860 million in assets, to Security Benefit Life Insurance Company for $72 million in 2000, the suit said.

Since 1991, the suit said, N.E.A. members have invested more than $1 billion in the Valuebuilder plan.

The fees levied in the Nationwide and Security Benefit annuities “far exceeded” those of comparable retirement vehicles available elsewhere, the suit said. The fees in one of the annuities recommended for the Valuebuilder plan reached 10.62 percent, according to the suit, making it exceedingly difficult for investors to make money in the plan.

Dan D. Otter is a teacher and operator of www.403bwise.com, a Web site aimed at educating retirement plan participants about high fees associated with some of the investment vehicles. He said teachers were especially vulnerable to problematic plans. “There is an army of agents trolling school districts across the country selling high-fee variable annuities,” he said. “I want all 403(b) participants to know how the plan works and also advocate for low-cost choices.”

According to regulatory filings, N.E.A. Member Benefits “recovers its costs through contracts with various program suppliers” as well as the N.E.A. In 2005, the corporation generated income of $52 million, the filings stated.

Ms. Sotir said that figure included income generated from many contracts, including those covering the N.E.A. credit card, home financing and life insurance programs. “Valuebuilder is a very small portion of that,” she said.

The suit against the N.E.A. is the second such case filed by lawyers at Keller Rohrback against an association that administers retirement accounts to its members. Last April, the firm filed a class action against the New York State United Teachers Member Benefits Trust, a retirement plan set up to benefit teachers in the state.

Edward A. H. Siedle, a lawyer and president of Benchmark Financial Services in Ocean Ridge, Fla., a company that investigates money managers on behalf of pension plans, also represents the plaintiffs in the case. “Investors may purchase annuities for lifetime income, but for unions, endorsing annuities is lifetime income,” he said. “Teachers deserve better.”


SEIU organizers picket, protest SC hospital investment

Organizers with a national health care workers union held signs and handed out fliers in front of the Hilton Head Island and Hardeeville hospitals Monday, questioning Tenet Healthcare Corp.'s commitment to patient care. Five protesters held homemade signs that read: "Tenet: $ for CEOs not patient care," and "Tenet puts profit before patient care." They stopped motorists entering and leaving the hospitals to hand them fliers criticizing the company.

The protesters represent SEIU Healthcare, a Washington-based union composed of 900,000 nurses, doctors, lab technicians, and nursing-home and home-care workers across the country. No employees of Hilton Head Regional Medical Center or Coastal Carolina belong to the union.

The union, which calls Tenet Healthcare Corp.'s recent purchase of Coastal Carolina Medical Center "$35 million in misplaced priorities," will protest outside the two hospitals here and at another Tenet-owned medical center near Charleston over the next two weeks, said Grant Williams, an organizer.

"We're trying to educate the public that all of their concerns about Tenet are valid," Williams said at about 4 p.m. Monday near the entrance of Coastal Carolina. "From what we've seen so far, there are a lot of hospital employees that don't like the changes out here, and they're real happy that we're here."

Local hospital officials directed questions to Tenet spokesman Steven Campanini.

Campanini said the union's messages were "half-truths," and the Hilton Head hospital's employee and patient satisfaction rates were "four or five stars on a consistent basis."

He said Tenet budgeted to spend more than $750 million last year and plans to spend about $750 million this year on new equipment for its hospitals.

"Those numbers speak for themselves," Campanini said.

Tenet has invested more than $40 million a year in clinical quality initiatives and has among the best overall quality scores in its peer group in the nation, according to federal analysis, he said.

SEIU says the $35 million Tenet spent to acquire Coastal Carolina should have instead been spent on improving existing Tenet facilities and updating technology and equipment.

For a half-hour Monday afternoon, about one in every three cars entering or exiting the hospital stopped to chat with protesters and receive fliers. The group also plans to attend a public informational session about the Coastal Carolina sale tonight at 7 p.m. at Hardeeville City Hall.


Hollywood writers union 'prepping for a fight'

If the entertainment industry implodes in a paroxysm of labor disputes this fall, blame Tyra Banks. Last summer, the 34-year-old supermodel turned TV host unwittingly became the eye of a highly publicized storm. The writers of her reality show, America's Next Top Model, staged a mini-strike, claiming that, even though contestants are making up their own words, the ideas and the structure of the series belong to the writing room. The ANTM staffers wanted to be recognized as television scribes by the Writers Guild of America, with union pay and benefits. At one major rally, nearly a thousand West Coast WGA members turned out in support. But the wordsmiths' rhetoric strayed from the issue at hand into a Network-style rant about the real anxiety among all show-biz creatives. "Digital downloads! Internet video-on-demand! This is the future!" shouted Phil Alden Robinson, screenwriter of Field of Dreams. "If we're not united, we're not going to get a good deal!"

What do they want? Residuals. Specifically, they want a piece of the new-media pie. That's online reruns and secondary content like webisodes, mobisodes, minisodes, and character blogs — all the goodies you can get on your laptop, cell phone, and iPod. When do they want it? By October 31, when the WGA's current three-year contract with the studios expires. And if the parties can't settle, the WGA has threatened to strike — and possibly take the Directors Guild of America and Screen Actors Guild with it. In response, producers are stock piling scripts like canned goods, and studio execs are furiously slogging through piles of unproduced projects. "It's like a Rocky montage," says Michael Kernan, a vice president at talent agency ICM. "They're prepping for a fight."

But here's what the WGA needs to know before stepping into the ring this summer: The studios are still groping for a way to make money on digital media. Like the music industry, they've been too busy fighting piracy and filing lawsuits to figure out a business plan. "They say, 'We can't predict the future, so let's stick with the old model,'" says Peter Guber, head of Mandalay Entertainment. "The guilds are saying, eWe can't predict the future, but the old model sucks.'"

Surprise twist: The WGA brought this predicament on itself. The last technological shift that rocked Hollywood — the advent of home video — led to a series of strikes in the 1980s. Studios rejected the WGA's overreaching demands, and the guild's 9,000 members all walked out. After six long months — and millions in lost wages — the guild agreed to an embarrassingly bad deal — 0.3 cents on the dollar — for home video revenue. The DVD market has since boomed into a $24 billion-a-year industry, but studios are already bracing for the coming decline of the DVD. "The home-video pie is shrinking," says one studio exec. "The WGA's demand for more money right now is like a teenager asking for a new car the day after dad lost his job." And when the DVD goes the way of the laserdisc and we're all streaming Die Hard 9: Ouch, My Back! directly into our visual cortices, writers will still be stuck with a fraction of what they want — unless they can push the studios to get creative. And here's another subplot: All free online material is considered promotional, stuff that writers are expected to churn out without any residuals at all.

It's not hopeless. For TV writers, anyway. Online sites like YouTube track viewers with precision — even better than Nielsen. But to turn numbers into money, they'll need to steal a trick from Google. Most Internet content comes with ads, so an argument can be made that it's not promotional — it's just TV on a different box. So here's a thought: Writers and networks could share online ad dollars. After all, more views of Web faves like The Office means more ad impressions and more profit. It'd be win-win, but it's an unlikely outcome. Networks sharing ad revenue with writers? Cue the laugh track. Remember, the network fronts all the costs and bears the financial risk. Would keyboard jockeys be willing to take a hit if a show bombs?

Actually, a handful of Hollywood heavyweights are ready to do just that. John Wells, screenwriter, director, and producer (The West Wing, ER) created the Writers Co-Op in March, cutting a deal that lets top-tier writers trade one-time, up-front payments for a share of the gross. It's riskier, but the potential payoff is massive, as bankable actors like the Toms — Cruise and Hanks — discovered years ago. The WGA should grab a piece of this action. If the guild can turn itself into a broker for such deals, it could increase its power; other wise, it faces obsolescence.

Unfortunately, we may be in for a third-act complication. If negotiations stall in October, the WGA's smartest move is to beg off till next summer, when, say, Kiefer Sutherland and the rest of SAG demand their cut of digital profits. At that point, the scribes could try to piggyback on the actors' sweeter deal. Don't be surprised, however, if the creatives and the suits agree only to resume negotiations when contracts come up again in 2010. That's Tinseltown for you: Even the offscreen action is a setup for a sequel.


WA state Ford dealer replaces strikers

Six weeks after 30 union mechanics and parts workers went on strike, Columbia Ford plans to start servicing cars again with replacement workers as early as next week. "We are in the process of hiring, and we are moving forward," Pat Sari, president and general manager of the Longview, WA dealership, said Monday. "We hope to be servicing cars in a week. ... We will be doing more work as the demand increases."

Sari and union leadership haven't bargained since a fruitless July 9 session with a federal mediator. No new talks or mediation sessions are planned, and mechanics and parts department workers continue to picket the business at its Seventh Avenue car lot. "We have asked the union agents to revote on the same package," Sari said. "We've been open to other suggestions and other possibilities we've shown them. Their wages are above average and the benefits are above almost anyone."

Columbia Ford is proposing to cap its monthly contributions to health coverage at $650 per individual for family coverage, leaving Teamsters workers to each pay about $100 a month. Currently, the workers pay $34 a month. Machinists' health care costs would increase to $133 a month.

Union representatives from Teamsters Local 58 and Machinists Local 1350 did not immediately return phone messages Monday afternoon.

However, the union has said that while the immediate cost increase is of a concern to the union, workers are especially wary of how much more they would pay as health insurance costs continue to escalate.


Gov't union strike set to drag on in Vancouver

As Vancouver entered its first day of a full-scale municipal shutdown yesterday, leaders on all sides of the broken negotiations were digging in and giving off clear signs the current walkout is likely to be a long one. At City Hall, Mayor Sam Sullivan stuck firmly to his message that the city has extended its final offer to the unions, and that he is not willing to approve any further concessions to get them back to the table.

"The regional partners have all agreed this is as far as we can go, being fair to the employees and fair to the taxpayers," he said. The city is offering a 9.5 per cent increase over the course of the contract. Meanwhile, union officials have said they've put in a number of different offers which have all been rejected by the city.

Both sides have said the main issue is contract length -- with the city bargaining for a 39-month contract and the union asking for a 36-month contract. But the city has been unyielding in its demand for a contract that continues beyond the 2010 Olympics.

"I personally can't imagine a scenario where I would put the reputation of our city at risk by agreeing to a contract that allows for a civic shutdown during in the middle of our most important moment," he added.

About 3,500 inside workers joined about 1,800 outside workers in setting up pickets yesterday morning. The outside workers started their strike Friday.

The city's 600,000 residents are now without garbage and recycling collection, building inspections and permits, city-run daycares, outdoor swimming pools, road, sewer and water main construction, and community centres.

At a press conference held to give an update on bargaining, city representatives said that unless the union provides a proposal that's "more consistent" with the city's last offer, "there simply is no basis for further discussion," city spokesman Jerry Dobrovolny said.

"To date, the unions have given us no real indication they are prepared to negotiate," he added.

During that press conference, six of the eight members of the CUPE Local 15 bargaining committee quietly slipped into the back of the room.

"Our members shot down the employer's last offer by 89 per cent," said Keith Graham, CUPE Local 15's chief negotiator. "Clearly our members have said we are not interested in the employer's position. ... "


UAW boss: Strike 'remains an option'

General Motors Corp. and Ford Motor Co., recipients of United Auto Workers givebacks two years ago, go back to the union today to seek more help in reviving their money-losing North American businesses. The union granted health-care concessions after concluding the automakers were in genuine financial difficulty. Union President Ron Gettelfinger has called the move the hardest thing he has done since becoming the UAW's leader five years ago.

Those concessions came in the middle of a contract. Today, GM and Ford formally begin negotiations with the UAW on new agreements to replace the four-year accords that expire Sept. 14. Both companies have said they need to reduce labor costs to become profitable again. Gettelfinger "has a profound understanding of the difficulties the industry faces, of the challenges that the management faces and the needs of his membership," said John Casesa, managing partner of auto consulting firm Casesa Strategic Advisors LLC in New York.

GM started negotiations this morning in Detroit, near the automaker's downtown headquarters. Ford's talks began this afternoon at its Dearborn, Michigan, home office.

"This is a very critical time in the history of the U.S. auto industry," Diana Tremblay, GM's lead negotiator, said at a news conference. "I think it applies to all of the companies."

Gettelfinger declined to discuss his bargaining strategy with GM and Ford, as he did three days ago when the UAW and Chrysler opened negotiations. Chrysler's parent, Germany's DaimlerChrysler AG, is selling the money-losing U.S. unit to Cerberus Capital Management LP.

Strike 'Remains an Option'

"I can promise active and retired members one thing - we're not going to negotiate in the press," Gettelfinger told reporters today. A strike "remains an option" if there's difficulty reaching accords with any of the automakers, he said.

The union wants four-year contracts again this time, the UAW leader told reporters at Ford. Joe Laymon, Ford's group vice president of human resources, said at a separate news conference that he doesn't expect a strike and declined to say whether Ford wants another four-year agreement.

GM shares rose 20 cents to $35.12 at 4:21 p.m. in New York Stock Exchange composite trading. Ford's gained 6 cents to $8.46.

GM, Ford and Chrysler pay $25 to $30 more an hour in wages and benefits to U.S. factory workers than Asian rivals such as Toyota Motor Corp. and Honda Motor Co. pay at their U.S. plants.

Financial Pressure

"They've got to make up a lot of that difference this time around or there may be a bankruptcy event before the next contract comes up," Craig Fitzgerald, an auto analyst at Plante & Moran PLC in Southfield, Michigan, said in an interview. "There is a greater chance that there will be a small- or mid- duration strike this time than at any time over the last 30 years that I've been following the industry."

Gettelfinger said in Dearborn that "I don't know if I accept" the automakers' estimates of the labor-cost gap. He criticized executive compensation at the companies and said, "You can't expect sacrifice from one side of the table."

Gettelfinger didn't refer to any executives by name. Ford Chief Executive Officer Alan Mulally, recruited from Boeing Co. in September 2006, was paid $28.2 million for his first four months, including $18.5 million related to the job change.

Health-Care Priority

Reducing health-care costs remains a priority for GM, Tremblay said. She declined to discuss specific proposals. GM spent $4.8 billion on U.S. health care last year, including $3 billion for retirees, Tremblay said.

Industry leaders such as GM Chief Executive Officer Rick Wagoner say the health-care gap puts products of the U.S.-based automakers at a cost disadvantage against the Japanese.

U.S. sales gains by Toyota, Honda and other overseas companies contributed to a combined $15 billion in losses at the three automakers last year. Most of the deficit has been in North America.

"The 2007 U.S. labor negotiations are another important opportunity to improve our competitiveness," Wagoner told shareholders last month. "We made a lot of important progress working with UAW leadership over the past several years."

Ford's Mulally told reporters in April that he was optimistic the automaker will be able to reach a "competitive agreement" in the talks.

Ford lost $3,200 per vehicle in North America in 2006, David Healy, a Burnham Securities Inc. analyst in Sierra Vista, Arizona, estimated in a July 20 note to clients. "Ford needs to find a `Way Back' before it can find its `Way Forward,'" Healy wrote, referring to the company's name for its comeback plan.

'Lot of Cash'

Gettelfinger declined to comment on whether Ford's financial condition will affect the talks. "They've got a lot of cash," he said.

"Ron is well aware of the financial situation at the Ford Motor Co.," Ford's Laymon said at his news conference.

Ford last year announced plans to close 16 plants by 2012, of which 10 have been identified. Joe Hinrichs, vice president of North American manufacturing, said the company is proceeding on those plans, with the final result "subject to whatever we come up with in negotiations."

The UAW president said last week at the start of the Chrysler talks that the 2005 health-care concessions "were the most painful decision I've done as president of this union."

Under those agreements, UAW-represented employees at GM and Ford diverted pay increases to fund retiree health care. Also, retirees were required to pay as much as $752 a year for family medical coverage.

At GM, 60 percent of UAW members voted to ratify the accord. Only 51 percent did so at Ford. The UAW declined to extend similar concessions to Chrysler in 2006. That issue will now be part of the negotiations for new contracts.

GM, Ford and Chrysler may propose a new fund, financed by the automakers and managed by the union, to administer health care for retirees, people familiar with discussions among the companies said in June. GM shares have risen 14 percent this year and Ford's have climbed 13 percent in part because of expectations that such a fund will be created.


State, SEIU bargain over non-employees

SEIU and state of Oregon negotiators were unable to reach agreement Friday on a new two-year labor contract for 11,700 home-care workers, so the two sides will seek a mediator. A marathon negotiating session began at 9 a.m. Thursday and lasted until 4:30 a.m. Friday, said Sue Wilson, who oversees collective bargaining for the state. "They realized they weren't going to come to an agreement," she said, so talks ended.

It's not uncommon for labor talks to move into mediation; the same thing occurred with recently concluded talks with Service Employees International Union Local 503, on behalf of state workers. Home-care workers also are represented by SEIU Local 503, but they aren't considered state employees.

The state has dropped its proposal to freeze wages for many home-care workers, and is willing to provide fully paid health insurance for the 2007-09 contract, said Karla Spence, home-care coordinator for SEIU. Another bargaining session is tentatively scheduled for Aug. 9, Wilson said. Until then, terms of the 2005-07 labor contract will be extended for home-care workers.


PA windowmaker shuts, Teamsters out

The nationwide housing slump, over-capacity and a changing market will cost about 160 employees at the Phillips Products plant in Selinsgrove their jobs. The employees, represented by Teamsters Local 764, have received the required legal notices advising them that operations will be phased out beginning in September, said Joseph McPhilamy, human resources director at Phillips' parent company, Tomkins Industries in Elkhart, Ind.

McPhilamy expects the plant, which makes vinyl windows and patio products, will be closed by the end of the year. Some employees will be given an opportunity to transfer to other facilities, he said. The market for vinyl windows is mainly in the South and Southwest, while the North and Northeast is still a good market for wooden windows, which Phillips doesn't make, McPhilamy said.

The nationwide slowdown in the housing market was another factor in the decision to close the plant, McPhilamy said. Seven years ago, the manufactured-housing industry produced 400,000 units, but the projection for this year is just under 100,000 homes, he said.

The Teamsters union has been working closely with the Governor's Action Team and the state Department of Community and Economic Development to try to keep the plant open, union spokesman Michael Hartman said. That effort is continuing despite the closing announcement, he said.

Two years ago, Phillips laid off 33 employees when it transferred two production lines to a sister plant in Chester, S.C.


Labor ad causes controversy

Union, mayor spar over strike during Olympics

A striking Vancouver union leader and the city's mayor disagree whether a new labour contract's end date could affect the 2010 Winter Olympics. Mayor Sam Sullivan said Monday that a key issue for the city is to not have the 2010 Winter Olympics disrupted by the contract ending and unions being in a strike position. "The unions have insisted we cannot add the 90-day Olympic effort on to the end of the three-year agreement," Sam Sullivan told CTV Newsnet on Monday. The city wants the 90 days to take the contract's end past the Olympic and Paralympic games, he said.

Those games will be over by March 22, 2010. All other public-sector unions in B.C. have agreed to the 90-day extension, he said. "We cannot get the Vancouver union to agree that they should not have the right to strike during the middle of what should be Vancouver's finest hour," Sullivan said. The union rejects that position.

"Mayor Sullivan is continually saying in his press conferences and to the public in Vancouver that the union actually wants the right to shut down the Olympics," Paul Faoro, president of CUPE Local 15, told Newsnet.

He said that his union is willing to sign a four-year deal, which would take the city well past the Olympics period to the end of 2010.

"Unfortunately, now Mayor Sullivan is saying the four-year deal isn't good enough for him because it might interfere with the municipal election the following year. This has been one of our frustrations, that the story continually changes out of our mayor."

Sullivan was elected mayor in November 2005. Municipal elections are held every three years in Vancouver.

Indoor workers walk

Indoor municipal workers in Vancouver walked off the job on Monday.

The job action by the 2,700 workers shuts down a range of services. They join 1,800 garbage collectors, street construction crews and other outdoor workers who began striking on Friday.

CUPE is calling this a full city shutdown.

Library workers could have joined the strike Monday afternoon, but they have chosen the study session route for now.

City officials say about 600 management and staff will try to maintain some essential services, but they won't be able to cover all the work of the estimated 6,000 Canadian Union of Public Employees (CUPE) workers who will be out on picket lines. They are collecting payments for parking fines.

The union's position

Wages are part of the dispute. The city is offering 10 per cent over the term of the contract.

Faoro said reports the union are seeking a raise of up to 18 per cent are incorrect.

"We have not tabled that. ... We haven't had enough negotiations to actually get to the table and actually talk about the terms," he said.

A city spokesperson says the two sides are too far apart to resume bargaining. Faoro said the city is refusing to come to the table.

"There are many issues driving this dispute that are not getting talked about," he said.

The city wants concessions that would weaken internal promotional language and layoff provisions. "This is really troublesome with labour shortages in the province," Faora said.

Job security and workloads are key issues to the union's membership, he said.

The impact

The city is asking people not to put trash on the street or in public waste bins. Garbage pickup will continue for commercial properties and apartment buildings since it is handled by private contractors. Merchants are being asked to clean the sidewalks in front of their businesses.

Residential garbage and recycling, which haven't been picked up since Thursday, are already piling up on laneways.

Stanley Park will remain open, but park washroom maintenance will be reduced. Beaches will remain open as lifeguards have been declared an essential service.

The indoor workers' strike has left many families who've put their kids in summer day camp scrambling to find alternate arrangements for child care.

Community and recreation centres are closed, as are municipal golf courses and swimming pools.

Even stray dogs won't be picked up unless they're deemed to be dangerous.

"There will be all sorts of problems," said striker Kevin Cavell. "There always is, it's not a good thing for anybody."

Two other municipalities in the Lower Mainland could launch job actions in the coming days. Several others haven't taken strike votes and are progressing in their negotiations.

Past Vancouver's civic strikes have dragged on. A dispute in 2000 lasted seven weeks, and a 1997 strike lasted six weeks.


UAW retiree pickets kick off bargaining

Larry Schafer, Dennis Duff and Linda Hodge boarded buses in Lansing at 5:30 a.m. Monday for a trip to Detroit. The reason? The General Motors Corp. retirees are concerned about the future of their health care coverage and want the United Auto Workers union to protect it. The trio were part of a Lansing-area contingent of about 75 people, mainly GM retirees, who caravaned to Detroit on two chartered buses. They joined a group of a hundred or so from Flint in a rally outside the GM-UAW Center for Human Resources in Detroit as representatives from the automaker and union prepared to kick off the official start to contract negotiations.

Retirees usually stage a kick-off day rally as contract talks get under way. This time, they were joined by a handful of active workers who marched in a circle around the main doors of the building carrying banners and picket signs.

"You took my youth," read one sign. "Now dignify my retirement."

Another read: "We sweltered on the assembly line. Support your retirees."

Some chanted union cadences as they walked. They were joined by UAW President Ron Gettelfinger and Vice President Carl Rapson.

Gettelfinger said his union is not in the mood to make concessions during contract talks with U.S.-based automakers, who say they need cost cuts to stay in business.

The comments came after the traditional handshake Monday morning between officials from the UAW and GM.

But underlying the bravado was concern. Several retirees said this round of contract talks will likely be more critical than in years past.

'History-making contract'

"This is a history-making contract," said Larry Schafer, 65, who put 38 years in at several GM sites in Lansing before retiring. "We definitely want to keep our benefits."

Schafer is worried that retiree health care plans may be pared further. A deal reached between GM and the UAW in 2005 required retirees to pay more out-of-pocket for their health care.

Hodge, 52, who retired a year ago, said she went to work for GM believing health care benefits would be paid for by the company when she retired.

"That's what they told me when I hired in," she said. "Now, they're taking that away."

But Duff, who retired 20 years ago, said the union and automaker alone can't solve the auto industry's problems.

"The government's got a lot to do with it," he said. "Until they bring in fair trade for us, it's going to be tough (for GM to compete with foreign rivals.)"

On the surface, it appears the union and GM are far apart as they try to ink a new national contract before a Sept. 14 deadline.

Ford Motor Co. also will seek concessions. Its talks opened Monday afternoon with a handshake ceremony in Dearborn. Bargaining with Auburn Hills-based Chrysler Group started last week.

GM, which lost about $2 billion last year and still isn't making money in North America, clearly will put concessions on the bargaining table.

"We know that these are going to be difficult contract negotiations," Diana Tremblay, GM's chief negotiator, said after the handshake at the human resources building along the Detroit River. "We know that we need to make some changes to make the business sustainable over the long term."

Neither GM nor the UAW would discuss the specific points they expect to negotiate. But analysts and workers expect worker and retiree health care, the controversial JOBS Bank and a two-tier wage and benefit system for new hires to be hot topics during this summer's talks.

But Gettelfinger said the union is not in a concessionary mode. He also said a strike still is possible despite the precarious financial positions of the Big Three U.S. automakers. He has said the union will try for a pattern contract that would apply to all, but said a target company hasn't been selected.

Sense of urgency

"That just depends on the tone of the negotiations," Gettelfinger said.

This year's auto talks have taken on a more urgent tone because the Big Three lost a combined $15 billion in 2006 and are in the midst of shrinking themselves and rolling out new vehicles in an effort to better compete with Japanese rivals.

Industry analysts have said reducing labor costs is critical to the companies' survival.

Domestic automakers say the talks need to bring them labor cost parity with Japanese automakers, who make about $2,000 per car more in profits.

The Detroit automakers say their hourly labor costs are about $25 more than three big Japanese competitors - Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. - when health care, pension, retiree and other costs are factored in.

GM, Ford and Chrysler must deal with rising health care costs and the JOBS bank, in which companies pay workers most of their salaries when their assembly lines aren't running.

Laurie Harbour--Felax, managing director at Stout Risius Ross Inc., who has done detailed studies of auto manufacturing costs, said her research has shown the Detroit Three pay $1,200 to $1,500 per car in health care costs more than the Japanese automakers.

Health care is a major issue for GM, which paid $4.8 billion for it last year and has said it is the company's largest competitive disadvantage.

"I think it's impossible to ignore the issue," Tremblay said. "We'll see how possible it is to address it."


Strike not top priority, says Vancouver mayor

Vancouver, BC Mayor Sam Sullivan said Monday that dealing with the civic strike is not his top priority, even as escalating job action by thousands of workers shut down services such as garbage collection, community centres and building inspections. The mayor cited the Millennium Line round table, the results of the film task force, a heavy city council agenda and a new policy proposal for the Little Mountain Housing site as his priorities for the week.

"I'm getting on with the job of being the mayor," he said after spending a large portion of the day touring the Canada Line construction on the "Dig the Dig" Family Bus Tour. "That's where my real focus is," he said. However, he said he was getting at least three briefings a day on the strike.

Mike Jackson, the Canadian Union of Public Employees Local 1004 boss, which represents the 1,800 outside workers who have been on strike since Friday, was not impressed. "The way Sam's off playing with the kids today, it shows that he's really not interested in getting the services to the taxpayers," he said. "He's completely disregarding that."

Mr. Jackson echoed a call by Vision Vancouver councillors to take the savings from the strike and use it as a rebate for homeowners. The last civic workers strike, which lasted for six weeks in 2000, saved the city around $1.3-million.

"In a billion-dollar budget, a million is not a significant number," Mr. Sullivan said, calling the proposal "voodoo Vision economics."

Monday was the first day the 2,500 members of CUPE Local 15, the union that represents Vancouver's inside workers, were legally able to strike. Mr. Jackson said CUPE 15 had pickets up at 124 sites across the city, including City Hall, community centres, pools, parks and work yards.

The inside workers issued their strike notice Friday after 89 per cent of the union's members rejected what the city called its final offer. Keith Graham, CUPE 15's chief negotiator, said the overwhelming vote should send a strong message to the city to get back to the table.

"That 89 per cent means a lot because they knew they were going to hit the streets on Monday morning. That takes a lot of nerve. That was a very gutsy move on their part and it should show the city how serious our membership is with respect to having some of our issues dealt with," Mr. Graham said after he and some of his bargaining team crashed a news conference by the city to discuss what services will be lost during a strike. A full list of those services can be found on the city's website, www.vancouver.ca/jobaction.

The union that represents Vancouver's library workers, CUPE 391, is also in a legal strike position for the first time in 77 years, according to president Alex Youngberg. Today and tomorrow, the union will stage one-hour walkouts at the city's 21 branches, starting with the Central Branch today at 10 a.m., to inform workers about bargaining issues.

"If after that we can't convince the employer and the GVRD [Greater Vancouver Regional District] to come to the table then we're really going to escalate strike action and branches will close," Ms. Youngberg said. Two library branches, Joe Fortes and Britannia, were closed Monday due to CUPE 15 pickets.

In the District of North Vancouver, where almost 800 civic workers started their own full-blown strike Monday, Mayor Richard Walton said he was working toward resolving the issues with their union, CUPE 389.

"I think we owe it to the public and our employees to do the best we can to find a fair and equitable settlement," he said. "The message I'm giving is we are ready and willing to come to the bargaining table at any time."


Indiana school board considers Teamsters

The Richmond, IN Community Schools Board of School Trustees is expected to decide Wednesday whether the corporation's bus drivers and bus aides can unionize. With the help of the Teamsters union, a majority of the corporation's bus employees have verbally petitioned the corporation for union representation but only recently submitted their request in writing. Teamsters Agent Jerry Hayden said 48 of 54 drivers and aides support his organization representing them. He was unavailable for comment Monday. The request, which was sent to Superintendent Allen Bourff, will be discussed at the board's meeting at 6:30 p.m. Wednesday.

Bus drivers and bus aides have complained of wages they call unfair and the cost of insurance.

The base pay for a bus driver is $76.80 per day for 4 1/2 hours of work, said Rodger Smith, the corporation's director of school operations and the bus personnel's boss.

They are contracted for 188 days with benefits of $4,774 toward a single plan and the corporation pays 85 percent of that benefit, he said.

Bourff has publicly stated that he would not endorse a union and did not have a written request from employees asking them for union for union support.

Now he does, Smith said.

"Whatever the (board's) decision is, we need to work from that point forward and get this behind us in one way or another," Smith said.

Bourff was unavailable for comment Monday.

Amid union discussions, the corporation is also considering outsourcing its bus garage.

Smith recently made a presentation about the Sodrel Transportation Group, an Indianapolis-based transportation group, which is interested in contracting with school corporations to expand services and create jobs.

Smith called the idea "a big if" at the time and said no progress has been made on a possible contract.

"There isn't any progress to make a recommendation at this point -- none whatsoever."


Calgary paramedics set to strike

Calgary's more than 400 paramedics have handed their strike notice to the city, threatening to walk off the job Thursday over salaries. However, it's expected the job action will not happen, as the Alberta government has vowed to block any attempted strike by paramedics. In the middle of an information picket in front of Calgary's City Hall on Monday morning, the president of the paramedics' union handed its intent to strike to the city's negotiating team. The CUPE Local 3421 union had to give 72 hours' notice before taking any action.

The province has said it will step in to prevent a strike by paramedics, either with a disputes inquiry board or an emergency resolution tribunal.

The city says it has contingency plans in place, but admits it can't provide service equal to what the paramedics now offer. Unlike police officers and firefighters, paramedics are not considered an essential service, which allows them to take strike action.

The city's paramedics, or EMS staff, took a strike vote last week, and received a 99 per cent strike mandate.

The city has offered paramedics 12 per cent over three years. The paramedics want 18 per cent, plus a retroactive market adjustment it feels is necessary to bring salaries in line with other city employees.

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