Here is a summary of provisions of the new six-year labor agreementbetween Deere and the United Auto Workers.
Maintain current base pay, even after companywide jobreclassification as long as workers do not transfer out of theirclassification.
Lump sum payments equal to 3 percent of qualified earningseach year for six years.
Quarterly cost of living adjustment (COLA) pay increases aremaintained.
Lump sum payout of $2,500 from an "excess overtimeaccount" for all employees with seniority as of Oct. 1,1997.
Roughly an additional $226.50 in monthy pension benefitsover the life of the agreement.
A $300 increase in supplemental allowances for earlyretirees over the life of the agreement. Early retirees receive $2,100per month until they reach age 62 and that will increase to $2,400 overthe life of the contract.
Five lump sum payments to workers who retired before Sept.30, 1997 of at least $170 and up to $510.
Continuation of "earned bonus hours" of pay forperfect weekly attendance, with a lump sum payout as a Christmas bonus.The payout previously occurred in October.
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Continuation of comprehensive health care benefits,including a $200 increase in both maximum annual dental benfits, to$1,400, and orthodontic benefits, to $1,500.
New hires on or after Oct. 1, 1997
New base wage scale for all new hires, with a 1 percentannual base wage increase, plus additional incentive earningsopportunities under the company's "continuous improvement payplan," or CIPP, plus quarterly cost of living adjustments.
Comprehensive health coverage under the John Deere FamilyHealth Plan clinic plan the so-called "companyclinic" option.
Job security provisions after 10 years' senority;supplemental unemployment benefits of $100 per month for workers withone to up to 5 years service, up to 26 weeks; and $125 per month forfive or more years service, up to a maximum of 39 weeks.
Pension benefits and eligibility for a tax-deferred savingsplan with a matching company contribution.
Also Deere and the UAW agreed on a comprehensive new workertraining, retraining and personal development program.
A labor agreement designed to preserve John Deere's Waterloo operations and provide significant future hiring was approved by United Auto Workers Local 838 and other UAW-Deere locals Sunday.
The contract reportedly protects pay and benefits of current Deere workers, enhances pension benefits and allows continued annual lump sum payments and quarterly cost-of-living increases.
It also allows the company to hire a new generation of workers over the next six years -- at roughly half the pay and benefits.
Faced with the pending retirement and potential elimination of more than half the 3,500-member Deere-UAW work force here by the year 2003, Local 838 members joined other UAW members in several states in ratifying a six-year contract affecting some 9,500 workers companywide, by an approval margin of about 74 percent both locally and chainwide.
The price of preserving those jobs is the establishment of a new wage and benefit structure for new hires -- which one source said establishes the "two-tier" wage structure the UAW resisted in earlier negotiations.
Base hourly wages for new hires will range from about $10.46 for general types of labor such as material handlers or storage system operators, up to $17 for skilled trade positions, with a 1 percent annual pay raise for the life of the contract. It also includes quarterly cost-of-living adjustments and the chance for additional incentive earnings under the company's "continuous improvement pay plan." Pay and benefits for those new workers will average about $25 an hour.
Workers hired before Oct. 1 will maintain their pay and receive lump sum payments equal to 3 percent of their earnings each year of the contract, plus enhanced pension benefits and continued quarterly cost of living adjustments. Job security provisions for those workers will be maintained, and kick in for the new workers after 10 years' seniority.
Some 300-plus job classifications in the Deere organization were reduced to 27 under the contract. Some workers will receive raises as a result of that reclassification, but no current worker is supposed to see a reduction. Workers currently earning more than they would under reclassification would have their current pay "red-circled," or protected, under the contract as long as they don't transfer.
In Waterloo, 55 percent of the current Deere-UAW work force will be eligible for retirement sometime during the next six years, Kinard said. Without the agreement, Deere could have eliminated that work force through attrition and intensified outsourcing of work to lower-paying plants outside the company or to facilities in Mexico.
Without the contract, Deere plants like the one in Ottumwa would either have closed or workers there would have been forced to negotiate separately for significantly lower pay and benefits, much as the foundry did earlier this year, Kinard said.
But in one key provision of the agreement, Deere agreed that in evaluating insourcing and outsourcing decisions the company will "use the average labor costs for employees hired after (Oct. 1) in making such decisions."
It was the first time since 1973 that Deere and the UAW concluded negotiations on time, without a contract extension, work stoppage or extending talks beyond the existing contract's expiration. Three years ago, UAW members worked five months without a contract until the 199497 agreement was reached.