http://labornotes.org/2010/04/workers-ny-silicone-plant-fight-big-wage-cutsManagement unilaterally hit production workers with a 25-50 percent pay cut. In a show of “shared sacrifice,” top managers cut their pay 8-10 percent for a little while. CEO John Rich made $1.6 million last year. Photo: Jon Flanders.
Jon Flanders April 30, 2010
When the private equity firm Apollo Management took over GE’s Advanced Materials plant in 2007, local labor activists were apprehensive about what might be in store for the 600-plus workers there.
Headed by Leon Black, a notorious graduate of the infamous ’80s Drexel Burnham Lambert school of leveraged buyouts, Apollo has a background of buying up “distressed” properties and “restructuring” them, which usually means workers take the hit in wages and pensions.
Things under the new boss started out nice enough. The company, whose silicone products are caulks, adhesives, foams, cosmetics and tires, re-branded as Momentive Productive Materials. It negotiated a new three-year contract in 2007 with the chemical, maintenance, and warehouse workers represented by IUE-CWA Local 81359 that locked in gains in pay and pensions and retained key job security provisions.
Workers in the Waterford plant, about a dozen miles north of Albany, New York, inherited the almost $30-an-hour wages and decent working conditions that had been fought for by generations of union families, going back to the great days of the CIO in the 1930s.
Then the hammer fell. With the contract signed and in place, Momentive executives approached the union in early 2008 saying they needed to transform the business. Months before the economy crashed, they sought wage cuts and outsourcing of warehouse work, plant labor, and heavy equipment operation, where many of the veteran workers resided.
Local 81359 offered many ideas to save the positions and prevent outsourcing, including work area flexibility, fewer supervisors, and lower starting wages for new hires.
“We did the math for them, showed them all types of business models,” said Dominick Patrignani, the local’s president. “But they had it all figured out ahead of time.”
FULL story at link.