As the third week of a strike by 3,600 Lockheed-Martin workers who belong to IAM Local 776 began on May 7, the company announced that its first quarter profits were 20 percent higher than during the same period last year and that it would be paying a quarterly dividend of $1 per share effective June 1, 2012.
A month earlier, Lockheed CEO Bob Stevens announced that he was retiring effective January 2013. When he does, his retirement security will be intact thanks to his two Lockheed pension plans worth $22.5 million.
“We would think that Mr. Stevens would agree with us that it’s nice to have a good pension,” said a posting on the website of IAM Local 776, which represents the striking Lockheed workers in Fort Worth, Texas, Edwards Air Force Base, California, and Pax River Naval Air Station, Maryland.
But it appears that Mr. Stevens thinks that only the wealthiest deserve a good pension. Lockheed demanded that its new contract with Local 776 eliminate pensions for new hires, which is likely the first step toward eliminating pensions for all its union workers.
When companies eliminate pension plans for new hires, often their next step is to freeze pensions for workers still eligible for pensions, writes Paul Black, Local 776 president, in a column that appeared in the Fort Worth Star Telegram’s editorial page. After freezing the plans, it becomes easier to eliminate them altogether, which is what led more than 90 percent of Local 776 members to reject the contract offer and go on strike.
Lockheed has already demonstrated that it would like to eliminate pensions. In 2006, it replaced the pensions of its non-union workers with individual savings plans that may or may not provide a secure retirement depending on how well the market does and how much a worker and her employer contribute to the plan.
In her book, When I’m Sixty-four: The Plot Against Pensions and the Plan to Save Them, Teresa Ghilarducci writes that there is no evidence to suggest that “typical workers can accumulate enough assets (in individual savings plans) to fund a comfortable retirement.”
According to Ghilarducci, corporations want to eliminate pensions because good pensions mean that workers don’t have to work as much to obtain a decent standard of living in their old age, which gives workers more bargaining leverage when it comes to determining wages and other benefits.
When employers can take away this bargaining leverage, they can make their workers work longer and harder for less money. “The loss in secure pensions shifts market power from workers to employers,” writes Ghilarducci. “And that means that the value of the reduction in workers’ wages is shifted to an increased value in employers’ profits!”
Lockheed has posted on its website a calculator that estimates workers’ lost wages during the strike, but the calculator can’t tell workers how much smaller their retirement savings will be without a pension plan nor how much money and benefits they will lose without the bargaining leverage that secure pensions provide.
This shift in bargaining power that Ghilarducci describes is one reason unions like Local 776 have been fighting so hard to hang on to their pension plans. Other workers are starting to realize that if a big union like Local 776 has its bargaining leverage reduced, it will have a ripple effect in the labor market.
As a result, the striking workers have begun to receive support from other unions including the Brotherhood of Locomotive Engineers and Trainmen, IAM locals 2511, 2768, 2513, and 2011, the Tarrant County (Fort Worth) Labor Council, the Transportation Communications Union, FITU Local 900, UFCU Local 540, UAW Local 218, IBEW, and the Doctors’ Guild.
People in the larger community have been supporting them as well. Organizers of the Austin May Day demonstration took up a collection for the strikers, and it will be delivered to them by John Patrick, secretary-treasurer of the Texas AFL-CIO. A number of local businesses and individuals have donated to strikers.
“This fight for benefits is happening across our nation,” Black said in a statement about Lockheed’s quarterly report. “While corporations like Lockheed (are) racking up big profits, they are working every day to take away money and benefits from their employees. . . . A profitable company can afford to share those profits with those that do the tough and highly skilled work that creates the profit.”