UAW strike threat looms at Ford, Chrysler

As Ford Motor Co. and Chrysler LLC renew contract talks with the UAW next week, experts say they'll zero in on aspects of the General Motors Corp. deal that aren't beneficial to them and will seek better terms to help them survive.

Ford and Chrysler officials would not publicly comment about what the GM deal means for them. But others were reading between the lines of a 24-page report, released Friday, on the UAW-GM contract.

"I think there's going to have to be substantial modification in the contract for both companies," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. He said a temporary wage cut was one option.

The UAW named GM as a strike target Sept. 13. UAW President Ron Gettelfinger said he will resume talks with Ford and Chrysler next week and has said he expects them to implement essentially the same agreement as GM.

Experts said it is unclear whether the union would be willing to strike either Ford or Chrysler, as it did GM, to get a similar deal. But they said they think it is clear that Ford and Chrysler need a customized deal, regardless of Gettelfinger's calls for "a pattern" among contracts with automakers.

The UAW-GM deal contains many provisions beneficial specifically to GM and its UAW workforce. However, some of those terms seem potentially damaging to Ford and Chrysler.

John Casesa, a veteran auto analyst and managing partner of Casesa Shapiro Group LLC in New York, said the UAW will have to give a different deal to Ford and Chrysler if it wants to help the companies survive.

"Ford's financial situation remains fragile," Casesa said.

"Because the main feature of the agreement is relief on health care for retirees and GM has the highest active-to-retiree ratio, it's disproportionately better for GM," he said.

GM provides health benefits to more than four retirees and surviving spouses for every active worker it employs. Ford's ratio is two retirees for each active worker, and Chrysler's ratio is about one-to-one.

While GM likely will be able to move $50 billion in retiree health care liability off its books, crosstown rivals have less to gain from that move and likely will need other concessions that similarly reduce the competitive gap with foreign automakers.

For Ford, the specificity of the GM agreement could force it to provide greater clarity about its turnaround plan, which aims to make the North American division profitable by 2009, said Arthur Wheaton, a labor expert from Cornell University. Ford lost $12.6 billion last year and is undergoing a restructuring. Chrysler lost $2 billion in the first three months of this year and majority ownership shifted to privately held Cerberus Capital Management.

Cole said he expects that Ford, when it reaches a deal with the UAW, will disclose the six remaining of 16 plants it plans to close as part of its restructuring.

Ford and Chrysler also face dealing with a component of the GM-UAW deal that allows GM to hire workers -- who would be UAW-represented -- for noncore jobs at lower pay.

Ford is ahead of GM in outsourcing noncore jobs, Casesa said. Over the past two years, the UAW approved what are known as competitive operating agreements at Ford plants that allowed noncore jobs to be subcontracted out at lower pay. UAW Vice President Bob King said that saved $750 million.

Now, the GM-UAW deal raises the possibility Ford might have to pay those workers more and make them Ford employees.

Despite the potential clashes, Cole and Casesa say the UAW would give Ford and Chrysler more-flexible deals within a very broad framework that they can still call "a pattern."


Michigan Gov.'s budget stunt: Layoff or Lockout?

Michigan State Police announced Friday afternoon that 90% of its staff will be laid off Monday, but within minutes the troopers' union denounced the action as a lockout by Gov. Jennifer Granholm and urged its members to report for duty anyway even though federal labor laws would probably stymie that move.

The state shutdown would leave 222 troopers and a handful of supervisors and emergency dispatchers on duty and all State Police posts and other worksites would be closed.

A wide range of services -- from truck weigh stations to criminal investigations and drug enforcement operations -- also would shut down. Specialized services would be reactivated only if it necessary in cases of "imminent threats to public safety, health and welfare," the State Police announced. In addition to the uniform troopers, 15 sergeants, three lieutenants and 27 emergency dispatchers would keep working.

However, Mike Moorman, president of the Michigan State Police Troopers Association, said in a prepared statement that "the backbone of this department" will be benched by the Governor's order.

Granholm "cannot say she is maintaining adequate essential services when the bulk of the state police are sitting at home, locked out from their worksites," Moorman said.

Union vice president Chris Luty said the troopers had taken an unconditional oath to protect the state's citizens and "we are calling on our members to continue to honor that oath and report for duty Oct. 1."

Moorman, in a telephone interview Friday evening, said he doesn't believe the department will allow troopers to ignore the shut-down by just showing up and patrolling.

"Federal labor laws say if you work, you have to be paid for it," he said. "It doesn't matter if you're a trooper or a factory worker. You have to be paid ."

He said 222 troopers will be stretched from the Ohio stateline to the western edge of the Upper Peninsula "and that's not good."


GM's lesson for unionized governments

Last week’s nationwide United Automobile Workers strike against General Motors - the first in 37 years - was a blink-and-you’ll-miss-it event: The union struck Monday, and a deal was announced Wednesday morning. That’s pretty quick for an accord that may transform private-sector labor relations in America.

The public sector, though, seems likely to get a pass.

The deal addresses GM’s top concern: gaining control of “legacy costs” - those pension and health-care benefits won in earlier contracts that have rendered the company globally noncompetitive.

The speed with which a deal was reached reflects a cold reality: Market forces have radically downsized the erstwhile giants, and threaten to eradicate them totally. GM today has about 80,000 employees in its U.S. plants - down from 450,000 a quarter-century ago. The UAW itself has lost more than a million members over the last two decades.

The bottom line?

Both GM and the UAW, driven by market forces, worked out a deal that should help keep GM competitive globally, while giving UAW members more job security.

Under the agreement, most of GM’s $51 billion obligation for retirees’ health care will be moved to a UAW-run trust. GM will pay about 70 percent of that obligation, or $36 billion, into the trust - and thus no longer carry the debt. (It will still cover employee and retiree medical benefits for the next two years.)

The deal reportedly gives workers a bonus, but no increase in base wages. And GM will institute a tiered compensation system allowing it to pay lower wages and benefits to newer workers.

The latter point is nothing to celebrate, but the alternative - a bankrupt and out-of-business General Motors - is in no one’s interest.

In coming months, the UAW will likely forge similar deals with Ford and Chrysler. And such reforms seem unlikely to end with the auto industry.

But health-care and retirement-benefit liabilities also confound the public sector - where, alas, there are no incentives to address them.

A struggle over health and pension benefits for retirees and current employees was at the heart of New York’s transit-workers strike two years ago.

Meanwhile, Mayor Bloomberg has been lobbying Albany for several years to add a pension tier for new hires, and to get all employees to contribute more to their health plans - with little success.

That’s because in the public sector neither side of a negotiation - the union or elected officials - has any incentive to make long-term deals that even address the ability of the tax base to sustain the increasingly heavy load.

Not surprisingly, public-sector unions - such as New York’s powerful teachers and health-care workers - are the only ones that have increased their membership in recent years.

This in no small way explains why business investment - and employment opportunities - are relatively scarce in New York, and why the state’s economic outlook is so grim.

Remember “What’s good for the country is good for General Motors, and vice versa”?

GM President Charles Wilson caused a stir in 1953 when he seemed to say that the policies that worked for his company would work for the nation. The principle is surely true now, at least as it relates to public-sector labor relations in New York.

Not that anybody’s listening.


U. of Cal. threatened with statewide strike Monday

The union of student academic workers and the union representing the majority of university staff are demanding fair labor practices and better benefits and higher wages as the Sept. 30 deadline to finalize their contracts with the university draws nearer.

American Federal of State County and Municipal Employees Local 3299, which represents 11,500 workers in the five UC hospitals and 8,500 workers across the UC system, held statewide pickets yesterday on all 10 campuses, including UC Berkeley.At the protest on Sproul Plaza, the union demanded higher wages and lower health care and pension costs for workers ranging from hospital technicians to campus custodians.

Meanwhile, United Auto Workers 2865, which represents 12,000 UC academic student employees, including GSIs and TAs, is filing charges against the university for what it called “unfair labor practices.” Union members claim the university has disrespected them at the negotiating table by withholding information and stalling progress in talks.

The academic student workers’ union said if its demands are not met by the contract deadline, workers may strike on Monday. “There’s a good chance that when you show up on Monday, there won’t be any tutors, readers or GSIs in class,” said Dan Roth, a UAW employee.

Nicole Savickas, university spokesperson, said the university is still in the process of negotiating with the student worker union and has not yet finalized the wages of the employees.

According to AFSCME spokesperson William Schlitz, the university pays 15 to 20 percent less to workers than other employers, resulting in a high turnover rate.

“If you don’t have a stable workforce, it will affect your stay as a student, and it will affect your stay as a patient in the hospital,” Schlitz said.

Protester Joe Pulido attended UC Berkeley for two years in the ’60s but dropped out because of the cost. Instead, he began working as a building maintenance worker at a physical plant on campus, a position he still holds today.

“I had this conception of the university being the perfect employer,” Pulido said. “In the last four years, I heard stories of co-workers having problems. I fight not for me, but for my co-workers as well.”

The UAW, whose representatives also joined the rally, holds similar concerns in negotiating their contract. Improving health care for student workers is a priority, said spokesperson Daraka Larimore Hall.

Aside from improved benefits, the UAW wants higher wages, which it says will make the university more competitive with its peers.

The university received state funding for the 2007-08 year for salary increases, and looks forward to increasing salaries to appropriate competitive market levels, Savickas said.

“Things are moving slowly, but we continue to work toward resolution, and look forward to working toward all proposals as quickly as possible,” she said.


SEIU political director pushes strike vote in WA

Even as Olympia, WA-based Behavioral Health Resources starts the process of taking over the Evergreen Counseling Center’s operations, more than 170 BHR counselors, case workers and social workers are in the midst of voting on whether they will go on strike. Evergreen closed its doors on Friday with Behavioral Health Resources scheduled to take over on Monday.

John Donaghy, the political director for Service Employees International Union Healthcare 1199NW, says that its employees at Behavioral Health Resources started voting on a strike authorization on Wednesday, with voting expected to be complete by the end of the weekend.

“The employees who come to BHR from Evergreen will be covered by our union contract as soon as their employment begins,” Donaghy said. “Some have already signed union membership cards and we have begun letting them know what is happening at BHR. Our current members at BHR will be inviting their new colleagues to join in whatever activities we engage in, up to and including a strike if one is authorized, so that client care services can be protected for Evergreen’s former clients as well as BHR’s clients.”

The union says that the Legislature authorized $24.5 million specifically earmarked to improve wages for healthcare workers and Behavioral Health Resources was given a slice of those state funds to do just that. But wages remain the same.

“Distribution of that money is subject to bargaining with SEIU and we have not reached agreement on that,” Behavioral Health Resources CEO John Masterson said Friday. “There are other issues on the table but I don’t want to bargain in the media. What I will say is it’s not a good scenario anywhere to have a strike. It leaves hundreds of clients without their regular clinician to provide services.

“It is BHR’s intent to settle the agreement as fast as we can,” Masterson said.

The contract between the SEIU and Behavioral Health Resources expired in March. Union workers did an “informational picket” about their situation in August.


Cal. nurses' union calls big strike for Oct.

Fremont-Rideout Health Group registered nurses announced Friday they will walk the picket lines for the second time in less than two months. A two-day strike is set for Oct. 10 and 11. Fremont-Rideout nurses will participate in a statewide strike involving an estimated 5,000 nurses from the Sutter Health chain with facilities in the Bay Area.

“It is clear now CNA (California Nurses Association) is more concerned with its own agenda than our nurses,” said Tresha Moreland, vice president of human resources for Fremont-Rideout. “We’ll take precautions as usual to provide the best care for our patients.”

Nurses’ representatives, however, said quality of care and availability of patient services are crucial to quality service. Nurses at 12 facilities in the Sutter Heath chain – including hospitals in Berkeley, Vallejo, San Francisco and San Leandro – will take part in the two-day strike.

“This will be one of the largest strikes in California since the 1990s,” said Heather Avalos, a registered nurse at Rideout Memorial Hospital. “Next week’s meeting was called off. The mediator doesn’t see a reason to meet now that we’ve called a strike, but we look at it as two weeks to get things settled.”

More than 200 nurses participated in a one-day strike Aug. 31 at four Fremont-Rideout facilities – including Rideout and Fremont hospitals, Fremont-Rideout Cancer Center, Feather River Surgery Center and Feather River Surgery Center, which had nine nurses who were affected by the strike, has since dropped out of the union.

Hospital administration and nurse negotiating teams were scheduled to resume contract negotiations Oct. 4.

Avalos said the nurses have accepted a 5.5 percent pay increase offered by the health group, but the health group has not acknowledged the union’s approval.

“We wanted to get money off the table because patient care is the issue,” Avalos said. “It’s not about money.”

Moreland said the approval was not received because there were “crucial deficiencies” in the response from the nurses.

“The strike came as a surprise,” Moreland said. “We were contacted by the federal mediator saying the nurses were ready to move on the economic aspects, but there were deficiencies in the response from CNA.”


Strikers irked by competition for community support

Striking members of Local 313 IUE CWA will meet today at Corning West High School to discuss the status of negotiations with Dresser-Rand Co. Glenn Painter, chief plant steward, said on Friday that the meeting will also include an update on court proceedings this week in Bath on an injunction Dresser-Rand is seeking to limit the number of pickets at sites in Painted Post. The meeting is scheduled to last from 10 a.m. to noon.

Painter said no vote will be cast today on what Dresser-Rand called its "final offer" to the union, which was rejected by the membership on Aug. 2. The 400 union workers from the Painted Post plant of Dresser-Rand have been on strike since Aug. 4, when their previous three-year contract expired. The strike will enter its ninth week on Sunday.

Painter said the union members are "outraged" by newspaper ads placed locally by Dresser-Rand on Thursday and Friday outlining the company's position on the negotiations. "The outrage is that the Dresser-Rand leadership team has decided to wage a media war with the local (union) to try and sway the community support," Painter said. "The community has been well behind the Local's endeavor to get a fair contract."

The ads appeared in the Star-Gazette. The company had planned ads for Saturday and Sunday, but pulled them from today's edition and Sunday's.

Painter said members of the union have been kept informed of the content of the negotiating proposals presented to union leaders by Dresser-Rand.

"To our knowledge the community is well aware of what we have faced and well aware that the union has been more than willing to discuss some of the concerns of the company," Painter said. "It's unfair to say we are willing to address all the concerns because some of the things the company has been asking us would cripple our members financially."

Chief among those company demands, Painter said, is higher health care premiums that 100 of the union's members already pay.

"It has actually changed the lifestyle they have led," Painter said. "One of the main sticking points of the negotiations is that we wanted it changed so we could help those members."

Painter said Dresser-Rand went to court, citing tension and violence on the picket line, to seek an order limiting the number of pickets to four at any one site. The issue was still being argued Friday afternoon in Bath, he said.

In addition, the union has filed federal unfair labor practices charges against Dresser-Rand, accusing the company of failing to bargain in good faith.

"We're confident that our charges will be upheld," Painter said.

Daniel L. Meisner, human resources manager at Dresser-Rand's Painted Post plant, could not be reached on Friday for comment.


Strikers hold out for fully-paid health insurance

For a third week, striking workers at the Riverside factory for Windsor Foods, owner of the José Olé brand of frozen meals, vowed to continue picketing the building until the company accepts health insurance proposals.

Large laminated posters from the company hung overlapped on guard rail near the factory entrance. One dated Sept. 28 said: "No negotiating sessions have been scheduled since the talks broke off on Thursday, September 13th and none are scheduled in the future at this time."

Lynn Sutter, vice president of consumer products, declined to say how many employees had crossed the picket line to return to work. About 450 workers are represented by Local 1167 of the United Food and Commercial Workers. Matt Bruno, a union representative on the site Friday morning, said a few mechanics had crossed the picket line but he wasn't aware of any others.

The company and union have remained at an impasse because of proposed changes to health benefits that would require workers to pay for a portion of their insurance.

Bruno said the issue is the maximum amount workers could pay, but Sutter disputes that. "Nobody from the union has ever communicated to us that the insurance caps are the issue," Sutter said. "We have said all along that we are willing to negotiate in good faith to reach an agreement."

Riverside police officers were called to the area Sept. 20 when it was alleged that a striking worker had struck a temporary worker with a set of keys and a soda can. No one was injured.

Police were called at 3 p.m. the following Thursday because language being used by striking workers was getting heated. No injuries were reported and no reports were taken, police records indicate.

Workers who have crossed the picket line say they have been harassed and threatened. Some workers on Thursday were escorted to their cars by security personnel.

"This is not a civilized strike," said Claudia Bueno, whose mother and two sisters work at Windsor Foods.

On Thursday night, eggs were thrown at one sister's house, Bueno said.

"Everybody pretty much knows where everybody lives," she said.

Bueno's father-in-law, another Windsor employee, recently had a kidney transplant. Bueno's sister-in-law was told while leaving the factory: "You should tell your father to give his kidney back," she said. "They're getting personal."

Bueno's 60-year-old mother-in-law, who has been on sick leave, intends to go back to work Monday.

"They can't live on $200 a week," Bueno said, referring to the benefit the union pays striking workers.

Sutter said she is unaware of any violent acts. "The company has taken measures to ensure that employees can feel safe working at the plant," she said.

Bruno said he isn't aware of any threats or violence.


Town shoots down employer's strike preparations

The oldest manufacturing company in Rockford, IL wants to build on-site bunkhouses for replacement workers as its contract with union laborers nears its end. But Gunite Corp.’s zoning request for up to 10 sleeping trailers with space for 96 temporary workers faces steep obstacles after a cool reception earlier this month from the Rockford Zoning Board of Appeals.

Gunite’s representatives told the city that they needed a contingency plan for maintaining production if the United Auto Workers Local 718 strikes when its contract expires Nov. 17.

“While we don’t anticipate that there will be a strike, we feel that preparing for that possibility is prudent and will assure that we are able to meet our customer needs,” said Eva Schmitz, spokesman of Evansville, Ind.-based Accuride Corp., Gunite’s corporate parent.

But Local 718 president Rick Kardell called the proposal a “scare tactic” intended to intimidate the union’s 136 members. The union and Accuride’s labor attorneys are hoping to begin contract discussions around Oct. 10.

“This is just protocol for Accuride; this is just what they do before they come up to negotiations,” Kardell said. The company brought stacks of cots into the foundry two and a half years ago before the last contract expired, Kardell said.

In the past 20 years, the union has gone on strike twice at the Rockford foundry, Schmitz said. In 1998, a walkout lasted more than two weeks as workers protested the wage and hours provisions in an offer from then-owner Johnstown America Industries Inc. Picketing workers cited poor morale at the foundry before ratifying a contract that included hiring an outside consultant to improve relations with labor and management.

While hiring replacement workers during a strike is not uncommon, building temporary on-site housing for them hearkens back to a more volatile era of labor relations.

As recently as 1989, labor supporters and contract workers clashed at a northern Minnesota construction site in a wildcat strike that drew national headlines. Boise Cascade was expanding its International Falls paper mill with a non-union Alabama-based contractor who brought in hundreds of southern workers to live in a camp outside the site. Tensions ran high in the small town until about 400 union supporters stormed the camp and burned it to the ground.

But erecting housing for replacements is rare and such spartan accommodations are not attractive to workers, said Professor Peter Feuille, former director of the Institute of Labor and Industrial Relations at the University of Illinois.

“This sounds to me like gamesmanship,” Feuille said. “Even sort of working backward up to the present, is the company really serious about this zoning request, and do they really expect the city to approve it?”

In a report, city staff expressed concern about the lack of bathroom or shower facilities in the trailers; workers would have to walk inside the plant to use them. The average temperature in Rockford last November was 41 degrees. On Sept. 18, the Zoning Board of Appeals heard from 11 objectors to the petition — nine of them Gunite employees — and unanimously recommended denial.

On Monday, the request for the special use permit will be considered by the Code and Regulation Committee, but will need a two-thirds majority of the City Council to gain approval.

“It got shot down big time on ZBA, and I don’t foresee it getting anywhere in Code and Regs or the City Council,” said Ald. Dan Conness. “I don’t think it took long to shoot it down; there wasn’t even much debate.”

Accuride has made similar contingency plans at other plants when union contracts wind down, Schmitz said. Accuride owns several companies that make steel and aluminum parts for big rigs, including Gunite, which makes brakes and wheel-end assemblies for heavy-duty trucks.

“We feel it would be irresponsible for us to disregard the needs of our customers and to not take steps to preserve the jobs of the employees should they call a strike,” Schmitz said.

If the two sides start bargaining Oct. 10, they’ll have a little over five weeks to write a new contract. Workplace safety issues will likely be a priority, Kardell said. The union decried workplace conditions after a floor collapsed at the foundry in January, leaving a worker stranded at his machine.

“We’re going to be crunched for time,” Kardell said.


Union stages mock funeral as bargaining tactic

Amalgamated Transit Union Local 1704 bus drivers and Omnitrans management appear to be moving farther apart in their efforts to resolve a contract dispute that could culminate in a strike next month. The two sides exchanged barbs Friday in separate events designed to gain public support for their respective positions.

Omnitrans bus drivers plan to strike on Oct. 12 after eight months of failed negotiations. Management officials will meet with union representatives on Tuesday and Wednesday in an attempt to work out a deal.

Omnitrans officials held a morning news conference Friday to clarify what they called "myths" put out by the bus drivers' union.

They were especially angry at a union protest that took place in the afternoon that featured a mock funeral procession to symbolize the death of the workers' faith in Omnitrans' management. "I don't think that a mock funeral procession, a stunt, demonstrates that they are interested in negotiating in good faith next week," said Omnitrans marketing director Wendy Williams. "The stunt does nothing to advance negotiations and only serves to degrade relations. You don't see Omnitrans management pulling stunts."

Penny Lilburn, vice chairwoman of the Omnitrans board of directors, said the union rejected a "very fair and reasonable offer" that would cost taxpayers $65 million over the next three years.

"We have an obligation to make sure the agency is run efficiently," said Lilburn, also a Highland City Councilwoman. "We've given everything we can give."

The transit agency has offered its 445 bus drivers a 9 percent wage increase or 3 percent annually for three years.

The Omnitrans proposal would pay a starting hourly wage of $14.28, which is higher than what bus drivers receive in Orange County, Los Angeles and Long Beach, Williams said.

Omnitrans has made at least 16 contract concessions during 29 negotiation sessions since January, Williams said.

The previous contract expired March 31. The union voted 229-113 to reject the contract offer in August.

Besides the wage increase, drivers would see larger paychecks because they would save on their monthly out-of-pocket health insurance premiums, Williams said.

The contract offer also establishes for the first time an account for health benefits for retirees.

Three hours after the news conference, the bus drivers' union presented a starkly different perspective.

About 100 bus drivers wearing red shirts and carrying picket signs marched from the parking lot of Nunez Park across Fifth Street to the entrance of the Omnitrans headquarters.

The procession was led by four workers holding up faux headstones followed by six people carrying a wooden coffin.

Patricio Guillen, a Roman Catholic priest who runs a nonprofit group that helps Latino immigrants, performed a mock eulogy to mourn the failure of the two sides to overcome their differences. Guillen also called on management to make a better offer.

But union leaders remained skeptical.

"We have no faith that they'll ever be able to offer us a fair contract," said Dale Moore, president of the Amalgamated Transit Union Local 1704. "We have no faith that they'll do what's right."

Moore said the agency's health benefit package fails to meet the needs of workers and their families.

Moore added that management's offer is inadequate because it does not make pay increases retroactive. Instead, the agency has offered a one-time payment of $175.

The two sides are only 1 percent apart on wages. The union wants 10 percent over three years compared to management's offer of 9 percent.

The union also is seeking a contract that would include paid arbitrators to address grievances.

Billy Roy, who has worked as an Omnitrans bus driver for six years, said it was a difficult decision to support a strike.

"It's going to be a hardship on everybody," said Roy, who is married with four children. "But we believe this is the right thing to do."

Omnitrans serves about 50,000 riders a day throughout the San Bernardino Valley.

Not all bus drivers agree with a strike.

Mike Donato, a 16-year Omnitrans driver, said management has put a fair offer on the table.

"Quite a few operators feel it was a good offer," Donato said. "You can't get everything at once."

While Omnitrans is hopeful a strike can be averted, the agency is preparing contingency plans that will keep more than half of all bus routes operational on a limited schedule.

Williams said Omnitrans will use properly licensed supervisors and support personnel to provide as much service as possible if there is a strike.

Omnitrans will not charge fares of its riders during a strike, she said.

Riders should expect delays because of overloading, Williams said.

A strike will not affect Omnitrans' Access curb-to-curb service for disabled riders. Omnilink minibus service in Yucaipa and Chino Hills also will not change, because it is operated by a private contractor.


Teamsters' bias for Clinton crony a "conflict of interest"

Tensions in Interstate Bakeries Corp.’s bankruptcy reorganization intensified Friday when two entities voiced vastly different opinions on recent requests made by IBC.

JPMorgan Chase leads a group of lenders that were owed $450 million when the Twinkie-maker filed for bankruptcy in September 2004. It said IBC should have only until Oct. 31, rather than until Jan. 15, to file its reorganization plan. That opinion was part of an objection filed by JPMorgan on Friday in response to IBC’s Sept. 13 request to extend the deadline for the eighth time.

Friday’s developments are the latest twist in the drama over the future of one of the nation’s largest bakers, one that pits the company, organized labor and various lenders against each other. The parties will face one another Wednesday at a hearing before the U.S. Bankruptcy Court in Kansas City.

IBC has said a number of parties are interested in providing financing if and when it emerges from bankruptcy. But it contends that those proposals are contingent upon reaching new agreements with the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union by Sunday — Sept. 30. While Interstate and the BCTGM have continued to hold discussions, talks between Interstate and the Teamsters broke down the week of Sept. 10.

Interstate further said that if it is unable to gain such agreements by Sunday, it will ask the court to grant it a 30-day extension, which could include selling the company in whole or in parts.

JPMorgan’s filing acknowledged that Interstate has been actively seeking post-bankruptcy financing, although unsuccessfully, since June.

JPMorgan said the lender group objects to anything other than a single 30-day extension from Oct. 3 to “finalize any real, viable funding proposals, or, if all else fails, develop a comprehensive plan to sell their business.”

Meanwhile, the unsecured creditors committee said it generally supports Interstate’s request for a Jan. 15 deadline, but only if it lifts restrictions on potential investors talking to third parties, including the committee.

Such a restriction has been loudly denounced by the Teamsters, which allege that One Equity Partners and Yucaipa Companies LLC, an investment firm headed by Los Angeles-based billionaire and the Bill & Hillary Clinton confidant Ron Burkle, have both expressed interest in Interstate. However, the Teamsters contend, neither has been seriously considered by Interstate because they refuse to sign confidentiality agreements that preclude them from talking to third parties, including the unions.

Calls to One Equity Partners and Yucaipa were not returned.

Interstate officials declined to comment on Friday’s filings, but did say they would file their responses on Monday.

The unsecured creditors committee, which includes a representative from the Teamsters, also filed an objection to Interstate’s motion for permission to withdraw from the bread market in Southern California, which it announced in August. That plan entails closing four bakeries and eliminating 1,300 positions, including more than 800 jobs held by Teamsters.

While Interstate says withdrawing from that market is in the course of “ordinary business,” and therefore doesn’t require the court’s permission, the committee says it’s far from ordinary business.

The committee said that it was blindsided by the announcement, but that it’s moot.

“The egg has already been scrambled,” the committee said, and thus the court, at the very least, should delay Interstate’s Oct. 20 withdrawal from the market for 30 days to give the company and unions time to amend collective bargaining agreements that could help the region become profitable.

In its own objection, the Teamsters said it’s time other parties have an opportunity to present their own plans.

The Teamsters also objected to exiting the Southern California bread market, saying that Interstate has not met standards to do so without prior approval.

Interstate, the Teamsters said, repeatedly asserted in its motion that it has completed a cost-benefit analysis.

“In fact, no reasons are given in the motion. It is as if (Interstate) hoped to achieve goodness by professing their righteousness to others loudly and repeatedly,” said the Teamsters. “Such actions cannot get a fool into heaven any more than it can get (Interstate) out of Southern California.”

At this point, said Kevin Starke, senior equity analyst at Weeden & Co. LP, it’s a high-stakes chess game.

In analyzing how the scenarios could play out, Starke said he questions the parties’ real motives, including Interstate’s.

Maximizing the value of a company is paramount under bankruptcy rules, which in this case would not be liquidation. And the only way to save jobs, Starke added, is through concessions from the unions.

Meanwhile, the two potential investors the Teamsters want to bring to the table have probably given assurances of light wage cuts for union employees.

“But I think the judge will favor the people who are working through the established committee system, and the Teamsters’ role in this is starting to show a measure of a conflict of interest,” Starke said.

“The Teamsters have the ability to hold up the feasibility of other plans and so to stymie the whole process. … They’d better be careful, because the bankruptcy code has provisions for dealing with stubborn unions.”

What’s next?
•Interstate Bakeries, its lenders and its unions will square off Wednesday in bankruptcy court.

•Some lenders are pushing for a final 30-day extension.

•Financing hinges on new union contracts, Interstate says, but the Teamsters have backed away.


Temporary permanent replacements hired at Space Center

United Space Alliance said it plans to hire hundreds of workers to replace members of the Machinists union on strike at Kennedy Space Center since June 14 over failed contract negotiations.

Meanwhile, a letter dated Friday from 23 members of Congress to Michael McCulley, president and chief executive officer of United Space Alliance, encourages the company "to reach an agreement in a timely manner."

The "nation is counting on a continuation" of the productive partnership between the union and the company to "ensure that the remaining shuttle missions are carried out safely and successfully," the letter states. "If we are to transition smoothly from the space shuttle program to the Ares/Orion program, we will need the talents and experience of this workforce."

United Space Alliance spokeswoman Tracy Yates said the company's hiring plan "is not an effort to replace" the strikers permanently "at this time."

Yates said the replacement workers will be hired as subcontractors or temporary company employees, but converting them to permanent employees "is an option that USA could exercise at any time."

A representative for the International Association of Machinists and Aerospace Workers Local 2061 called the company's hiring plans a common "ploy to scare" the union to end the strike, or at least get strikers to cross picket lines and return to work as "scabs."

"Our members ain't going to buy it," said Bob Wood, a representative for Local 2061. "It's pretty transparent."

About 445 union members at KSC are striking against United Space Alliance, NASA's main contractor for the shuttle program.

The company and the union have been at odds over a variety of contract issues, including annual raises, performance bonuses and benefits, including health insurance.

Working with a federal mediator, the two sides returned to the bargaining table Sept. 20 for the first time in more than three months, but negotiations broke down after one day.

Wood said union representatives plan to travel to Washington, D.C., today in advance of a meeting Monday with federal mediators, in hopes of getting the company back to the bargaining table.

Regarding United Space Alliance's hiring plans, Yates said she does not know exactly how many people the company will hire, or the timetable for hiring them.

In an advertisement scheduled for today's edition of FLORIDA TODAY, United Space Alliance invites applicants to apply for "hundreds of opportunities" in a variety of jobs, from painters and welders to machinists and crane operators.

The company advertises hourly wages ranging from $19.71 to $27.08, with benefits, or pay in lieu of benefits, and overtime opportunities.

"United Space Alliance now has a labor dispute with the union representing employees in these jobs," the ad states. "Employment in these jobs may be with USA or a subcontractor to USA."

Yates said the company placed the ad because of the long duration of the strike, and to relieve about 200 permanent company employees who have been performing extra duties normally done by the strikers.

Already, United Space Alliance has hired about 130 temporary workers as subcontractors to handle jobs left vacant by the strikers, Yates said.

In addition, more than 100 workers who are part of the union's bargaining unit are not striking and are working for the company, Yates said. The union said many of this group of workers are not dues-paying union members.

The union released a copy of the letter from the Congress members to McCulley, which states: "While we appreciate your efforts to achieve a cost savings in the program, we also feel it is important that the workforce obtain a fair and equitable settlement in these negotiations."

Yates said that has been the company's intention.

"USA is as eager to resolve this, as these members of Congress are," Yates said, referring to the letter.

"Our goal has been a fair and equitable contract for the union members and the company," she said. "We want to ensure members of Congress that our shuttle preparations are proceeding safely and without incident."

All of the Congressional members who signed the letter are Democrats, and most are members of the House Committee on Science and Technology, and the House Subcommittee on Space and Aeronautics, according to Wood.

The two members of Congress who represent Brevard County -- Reps. Tom Feeney of Oviedo and Dave Weldon of Indialantic, both Republicans -- did not sign the letter.

Weldon spokesman Kurt Heath said Weldon was not aware of the letter, and he did not know if Weldon would have signed it if he had been asked.

A representative for Feeney could not be reached for comment.


Teachers strike looms Monday in Ohio

After meeting for nearly five hours Friday, Harrison Hills (OH) teachers and the Board of Education appeared no closer to an agreement. Teachers told 7News they will meet Sunday evening to decide whether they will the picket lines on Monday.

On Thursday evening, teachers marched on the board office. Teachers expressed concerns to 7News about the security firm, Huffmaster, that would be moving in during a strike.

Linda Rusen with the teachers' union said the security personnel had used intimidation tactics. Harrison County Sheriff Mark Miller agreed. "That is true. They've done some," he said. "There was an incident where someone was getting license plate numbers. One teacher thought she saw someone underneath a car."

Superintendent Jim Drexler said all of the security people have had a background check. "Those guards, security guards and substitutes that work here all go through a BCI check through the state of Ohio. That is same stringent requirements that is done for teachers," Drexler said.


AFSCME and SDS in solidarity

It was a college administrator's nightmare: students and union employees, joining hands and supporting each other's issues. In recent weeks, Ohio University student groups have walked informational picket lines with OU union workers, protesting the layoff of 24 maintenance and housekeeping employees.

Yesterday, Local 1699 of the American Federation of State, County and Municipal Employees (AFSCME) returned the favor, adding a few picketers to the 100 or more students who demonstrated on OU's College Green. The event was organized by Students for a Democratic Society.

"When the union ran into trouble ... the first two groups to come to our aid were SDS and the College Democrats," Dave Logan, president of the AFSCME Local, told the crowd. "You showed you believe in the union, and I want you to know, the union believes in the students."

The protesters had three demands: an end to OU's policy of limiting demonstrations to designated "free-speech zones"; the rewriting of the university's "Vision Ohio" strategic plan to include more democratic decision-making; and the rehiring of the laid-off workers from OU's Facilities Management department.

As some speakers noted, the protest itself violated school policy. Campus Police Chief Michael Martinsen, however, said he had decided to take no action as long as the event remained peaceful.

Union workers Tracy Wirick and Jeremy Moore, who both work in Facilities Management, said they think student support will help the union, and vice versa.

"I think at this point we're getting under (the administration's) skin a little bit," Wirick said.

After speeches, OU Provost Kathy Krendl agreed to answer questions and transmit the group's demands.

At a sit-down in the student center, Krendl told students she thinks they have more input into school policies than they claim, but that the administration can't give up final authority on budget decisions.

"I think you do have a say in this university," Krendl insisted. "But I think there are some things for which, actually, the administration and the board of trustees are fiscally responsible."

She added that the trustees want to open better lines of communication with students. For example, she noted the visits by board members to various colleges while in town for a meeting Thursday and yesterday.

"They feel also like there's been some anonymity on their part, and they don't like that," Krendl said.

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