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Alcoa Training Managers for Jobs in Case of Strike

Posted on: Thursday, 27 April 2006, 00:00 CDT

By Rebecca Ferrar, The Knoxville News-Sentinel, Tenn.

Apr. 26--MARYVILLE -- Alcoa Tennessee officials have been training managers since April 3 to work hourly positions in case there's a strike during negotiations that begin May 18 with the United Steelworkers of America, Local 309.

"We're preparing for a strike," Geoff Cromer, president of Alcoa's primary metals unit in North America, said Tuesday during an interview that also included Bob Wetherbee, president of the company's Rigid Packaging Division, and Malcolm Murphy, the division's location manager.

While Alcoa officials stressed neither side wants a strike, the aluminum giant is taking precautions.

The five-year master labor contract covers 9,000 employees at 15 plants, including about 80 percent of the 1,646 workers in Blount County, which makes aluminum and aluminum sheets for beverage cans.

The contract expires May 31, at which point both sides could agree to continue talks without a strike.

Negotiations will take place in St. Louis.

Alcoa officials expect the union will have difficulty with provisions including higher contributions in the company's health-care plan, a cap on retirees' medical benefits, and a two-tiered system for new workers that replaces a 30-year pension benefit with a defined contribution plan such as a 401(k).

Union officials could not be reached for comment.

Alcoa officials said they want workers to contain rising health-care costs by being more conscious of how much they're spending on care. The need for cost controls is driven by the increased pressures of a global economy, they said.

Alcoa's return on capital at the Tennessee rigid packaging operations is "dangerously low," officials said, a problem complicated by global competition with far lower employee and energy costs.

Power can cost $40 per megawatt-hour in Blount County compared to about $22 worldwide, they said, and payroll and benefits make up about a third of Alcoa's costs in the United States, compared to 5 percent to 8 percent at plants in China.

"We can compete," Murphy said, because Chinese plants' "productivity (and) quality is not the best," but eventually those foreign workers will become more productive.

"The (Alcoa) plant is viable if we grow and change."

Many Alcoa managers took vacations during the spring so they would be available to work this summer should a strike occur. Alcoa officials plan to put up fences at the Blount County plant to increase security.

Steelworkers have been picketing the plant weekly to protest changes to retirees' benefits. Officials said those demonstrations have been peaceful and praised the quality of their longtime work force.

Cromer also said the hourly workers have been "cooperative" as managers observe how to do their work if a strike occurs.

Alcoa officials said a strike could hurt the company in the long run because, if production slows down, Alcoa's customers might seek alternatives such as plastic containers and not come back.

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Copyright (c) 2006, The Knoxville News-Sentinel, Tenn.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Knoxville News-Sentinel

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