Private equity firm seeks to eliminate Iowa workers’ pensions

Pinnacle Foods, owned by the Blackstone Group, the world’s largest private equity firm, wants to eliminate workers’ pensions at its food processing plant in Fort Mason, Iowa. The workers, members of United Food and Commercial Workers Local 617, recently voted to authorize a strike to protect their pensions.

Pinnacle and Local 617 began negotiating a new contract in September. The old one expired in October, and the two sides agreed to continue negotiating while the old contract remained in effect. That agreement expired January 13. So far, there have been no reports of a strike or lockout.

“From the get go, the company said it wanted to eliminate pensions,” said Darin Boatman, president of Local 617 to the Daily Gate City. “Basically, they don’t want to fund it anymore.”

Boatman also said that the company has not offered anything in exchange for eliminating pensions: “No increase in pay, no 401(k) contribution. They just basically want to take it away,” he said to KHQA Channel 7 news.

Pinnacle is a New Jersey-based corporation that owns a number of national food brands including Birds Eye, Duncan Hines, and Log Cabin. Among other products, the more than 400 workers at the Fort Mason plant make Armour beef stew, beef hash, and chili. They also make Vienna sausages and Nalley’s chili.

Pinnacle Foods, which had net sales totaling $1.7 billion in the first three-quarters of 2012, was acquired by Blackstone in 2007 for $2.1 billion. Two years later Blackstone purchased the Birds Eye brand for $1.3 billion and folded it into Pinnacle’s product line.

Since acquiring Pinnacle, Blackstone has moved to reduce labor costs by closing and consolidating Pinnacle plants. In 2011 it closed a Birds Eye plant in Fulton, New York eliminating 270 jobs, many of which paid more than $17 an hour. It also closed a plant in Tacoma, Washington eliminating what the Seattle Times describes as 160 “stable, middle-class jobs.”

One of the products made at the Tacoma plant was Nalley’s chili, a Pacific Northwest regional brand. Pinnacle moved its production to Fort Mason.

Before it did so, Pinnacle and Blackstone received generous tax incentives and tax credits to finance an expansion of the Fort Mason plant, so that the plant could begin making Nalley’s chili and other products. In order to receive this public subsidy, Pinnacle and Blackstone agreed to hire 65 new employees at the expanded plant.

One of the tax credits Blackstone and Pinnacle received is called the Targeted Job Withholding Tax Credit, which allowed Pinnacle to divert to the City of Fort Mason a portion of the state income taxes that the company withheld from its workers’ paychecks. The city then matched every dollar diverted to it, and the combination of the diverted withholdings and the city’s match was used to pay for Pinnacle’s plant expansion. Pinnacle also received a rebate on sale taxes it paid to contractors and subcontractors for the expansion project.

Despite this generous public support, Blackstone and Pinnacle want to eliminate the pensions of the workers whose taxes were diverted to finance the plant’s expansion.

Blackstone isn’t just interested in eliminating retirement security for its Fort Mason workers. Blackstone’s founder, Peter Peterson, has been instrumental in the campaign to reduce US safety net programs.

According to Source Watch, Peterson is “a Wall Street billionaire who uses his wealth to underwrite PR campaigns against Social Security, Medicare, and Medicaid, citing concerns over the federal deficit.”

Peterson’s latest project is called Fix the Debt, a group of corporate executives, who are lobbying Congress to cut Social Security, Medicare, and Medicaid as part of their debt reduction program. Peterson and other Fix the Debt corporate executives want workers to lower their expectations about having a secure retirement.

However, workers at the Pinnacle plant in Fort Mason don’t seem to be ready to lower their expectations. A safe and secure retirement remains a priority for them.

“The company is wanting to take away our pension benefits,” said Boatman to KHQA. “That’s a very serious issue for us, because that’s what we look forward to live off of once we get older and retire.”

“I hope this (unanimous)  strike vote sends a strong message to the company and moves the negotiation process to a successful conclusion,” he added.


Short-haul drivers win big in Los Angeles

After a two-year struggle, 65 short-haul truck drivers at the ports of Los Angeles and Long Beach successfully negotiated a union contract with their employer, the Australian based Toll Group. The contract boosts pay, provides affordable health care and a pension, and gives workers a voice on the job. It’s a breakthrough contract in an industry with little if any union density.

Drivers are the backbone of the short-haul trucking industry, but they are shamefully underpaid and have few if any benefits.

The new Toll contract offers hope to all of them. Through solidarity and collective action the Toll workers overcame obstacles that kept them in poverty and semi-servitude; other short-haul drivers can do the same.

“If we can win, I know other port truck drivers across the US can unite just like we did,” said Orlando Ayala,” one of the Toll drivers. “A voice on the job means management can no longer humiliate us or force us to suffer in poverty while they profit.”

The first contract negotiated by Teamster Local 848’s newest members is remarkable. It boosts starting pay for day shift work from $12.72 an hour to $19 an hour; pay for night shift work increases from $13.22 an hour to $19.72 an hour. There’s also a $0.50 an hour pay increase for each of the next two years of the contract.

Before the new contract, the drivers’ health care premium was $125 a month for individuals or $400 a month to cover dependents, which meant that some did not have health insurance. Under the new contract, health care premiums are $30 a month for individuals or $150 a month to cover dependents.

Before the new contract, workers could contribute to a 401(k) plan, but many couldn’t afford to do so. Under the new contract, Toll Group contributes $1 per hour per driver in 2013 and 2014 to the workers’ defined benefit pension plan, the Teamsters Western Conference Pension Trust. In 2015, the employer contribution increases to $1.50 per driver.

Before the contract, Toll Group could impose changes to work rules, and the drivers had no recourse but to accept the changes or find another job. Under the new contract, the employer must give drivers notice of any proposed changes and the opportunity to meet with the employer to discuss the changes.

Before the new the contract, drivers had no paid holidays, sick days, or paid vacations. Now they do.

Two years ago it was hard to imagine this outcome. But Toll drivers began organizing and stayed with it despite company attempts to break their spirit.

In 2011, a group of Toll workers and community supporters protested Toll’s policy that prevented drivers from using bathrooms at the Toll port offices. When two drivers tried to present a petition signed 59 Toll drivers asking that management allow them use of clean restrooms, they were ignored and humiliated.

Months later, drivers supporting the union wore Teamster t-shirts to work as an expression of solidarity. The company responded by firing 26 drivers.

The firings didn’t stop the workers from organizing. Those who kept their jobs stood in solidarity with those fired, some of whom were eventually able to return to work.

In 2012, the drivers petitioned the National Labor Relations Board for a union election.

The company responded by stepping up its anti-union campaign. It held captive audience meetings where workers were fed anti-union propaganda. Some of the most vocal union supporters were harassed and intimidated. At least one was fired, but the workers held together and in April voted to join the Teamsters.

The drivers received ample community support. Religious and community leaders from many different backgrounds participated in rallies and other support actions to demonstrate their solidarity with the Latin American immigrant drivers.

Leaders of the Australian Transport Workers Union also stood with Toll drivers at a demonstration at a Toll Group corporate meeting in Australia and denounced the corporation for its inhumane treatment of its workers in the US.

The short-haul trucking industry, which shuttles goods between the nation’s ports and nearby retail warehouses, is unregulated and non-union. Most of the companies classify their drivers as independent contractors, which makes it illegal for them to join a union.

Toll is different. It employs its drivers directly.

Even though, most short-haul companies classify their drivers as independent contractors, the Teamsters contend that the drivers in most instances are misclassified. In the last year, the federal government and the State of California have increased efforts to investigate claims of misclassification.

If they find that employers have misclassifed their workers, then many more short-haul drivers will become eligible for union membership and have a chance to repeat the success at Toll.

Texas state employees rally to defend the public good

As the new session of the Texas Legislature convened on January 8 inside the State Capitol in Austin, leading lawmakers and state officials said that Texas should refrain from restoring budget cuts that left state services in tatters two years ago. Others favor even steeper cuts.

Outside of the Capitol, members of the Texas State Employees Union CWA Local 6186 (TSEU) gathered in a steady rain at their Defending the Public Good rally to demand that the cuts be restored and services expanded.

“Whether it’s public safety, public education, public health, health and human services or a host of other services, public services are a public good that affect the quality of life for all of us,” said Seth Hutchinson, TSEU organizing coordinator. “We should be talking about how to improve and expand them, not about maintaining them at their current inadequate level much less cutting them.”

State employees were joined at their rally by members of the Workers Defense Project, which helps low-wage, mainly immigrant workers organize for better pay and safer working conditions, Education Austin, the local teachers’ union, IBEW, the Texas AFL-CIO, and the Texas Fair Trade Coalition.

Inside the Capitol, other TSEU members gathered at the rotunda, then fanned out to give legislators a packet containing TSEU’s legislative agenda. The agenda’s priority is funding state agencies at levels that allow state employees to provide quality services. The agenda includes a fair pay raise for state and university employees and full funding for employee health care and pension benefits.

The agenda also contains proposals for improving services such as

  • Restore federal funding for the Women’s Health Program, (WHP may lose federal funding because lawmakers stopped funding Planned Parenthood clinics, the largest provider WHP services);
  • Increase funding for and stop privatization at state universities;
  • Improve caseload levels for parole officers and staffing levels at the Juvenile Justice Department;
  • Stop the privatization of state assisted living centers and state hospitals;
  • Restore funding for client services at the Department of Family and Protective Services; and
  • Stop the closure of health and human service offices especially in rural areas.

“Two years ago, Texas cut funding for state services by $15 billion,” said Derrick Osobase, TSEU political director. “It now has the resources to restore the cuts and expand services.” The comptroller estimates that total state revenue for the next two years will be $202.8 billion, 17 percent more than during the last two years. The picture isn’t quite as rosy as it appears because there are structural problems with the state’s revenue system and the Texas population is growing rapidly, but “the legislature could at least make a sizeable down payment that could go a long way toward restoring and improving services,” Osobase said.

There is also $11.8 billion in the state’s Rainy Fund, some of which could be tapped to upgrade services.

Texas spends much less on services than other states. It ranks 47th among all states in spending per resident. Texas is especially stingy when it comes to providing services to its children. For example, five out of 1,000 of its children receive abuse and neglect prevention services. The national average, according to the Center for Public Policy Priorities, is 44 out of 1,000.

Two years ago, Texas slashed its public education budget by $5.4 billion, eliminating thousands of teaching and other direct education services positions. Two days ago, the Texas Education Agency announced that state education funding is about $1 billion short of what is needed for school districts to meet expenses for this school year.

Children aren’t the only ones that the state scrimped on two years ago. Lawmakers cut $58 million from the budget for supporting 60,000 Medicaid-dependent elderly and disabled people in nursing homes.

In addition to restoring and expanding these and other vital services, TSEU wants to improve them. Doing so will require attracting and maintaining a qualified and experienced workforce, but turnover at state agencies is a major obstacle.

The annual turnover rate for classified state employees in 2012 was 17.3 percent, up from 16.8 percent in 2011 and 14.6 percent in 2010. In some high stress positions, the rate is higher:  For example, 35.9 percent for Juvenile Corrections Officers, 22.2 percent for nurses, and 25 percent for Child Protective Services Specialists.

One of the main reasons for high turnover is low pay. Two years ago, the Center for State & Local Government Excellence reported that Texas state employee pay on average was 17 percent lower than pay for comparable work in the private sector.

“State employees have gone four years without a pay raise, so it’s time for one,” Osobase said. “A fair raise and full funding for health care and pension benefits would go a long way toward lowering the turnover rate and improving services.”

Osobase also noted that state retirees haven’t received a pension increase since 2001 and that it’s time for the legislature to fully fund the pension plan so that pensions can be raised.

Illinois passes bill barring some state employees from being union members

The Illinois State Senate during a lame duck session passed a bill on January 3 that would bar thousands of state employees from being union members and bargaining collectively.

Gov. Pat Quinn, a Democrat, said that he would sign the bill, which was passed by the state house in 2011, but AFSCME, the largest union of state employees, succeeded in getting the bill’s senate sponsor to file a motion to reconsider the vote. The motion temporarily delays the signing of the bill by Gov. Quinn. AFSCME and members of the Quinn administration will hold talks this week to see if a compromise that protects the rights of those who are already members can be reached.

Those affected by the bill are employees classified as merit-based compensation employees who work for the governor, lieutenant governor, attorney general, secretary of state, treasurer, and comptroller. They work as public information officers, attorneys, policy and planning employees, mid-level managers, and a host of other positions that provide professional services. Also excluded would be all state agency legislative liaisons.

“The senate’s action is not only an insult to the thousands of workers who have had their union rights taken away, but also should be a reminder that Gov. Quinn and his allies in the legislature have no interest in helping Illinois workers maintain a middle-class way of life,” said AFSCME Council 31 Executive Director Henry Bayer.

About 97 percent of all Illinois state employees are union members, and there are a number of petitions seeking union membership by merit-based compensation employees pending before the Illinois Labor Relations Board.

Many merit-based employees sought to join unions in 2009 when then Gov. Rod Blagojevich froze the pay of all non-union state employees. Gov. Quinn also imposed a pay freeze on merit-based compensation employees in 2011.

The bill, SB 1566, could affect as many as 3,500 state employees who joined a union after December 2, 2008 or are seeking union recognition from the state labor board.

The governor would be able to select up to 1,900 current union members whose work is defined in the bill as being ineligible for union membership and declare them non-members. About 1,600 employees whose petitions for union representation are pending before the labor board would be ineligible for union membership.

Gov. Quinn, who AFSCME says has lobbied relentlessly for the passage of SB 1566, argues that many of those affected by the bill are managers and shouldn’t be in unions. But Bayer told the Springfield Journal Register that the union believes that anyone who wants to join a union and bargain collectively should have the right to petition the labor board and that the labor board should be the one to decide whether they can be members of a union.

Gov. Quinn says he supports SB 1566 because the bill gives him more options to deal with budget shortfalls. Illinois’ projected budget shortfall for fiscal year 2013 is $1.8 billion. In 2011, the last time the governor froze merit pay raises, estimates are that the freeze saved the state about $17 million, less than 1 percent of the this year’s projected shortfall.

Bayer said that there’s another more important reason that Gov. Quinn supports SB 1566. “Our fear is the real motivation here is to take positions out of the bargaining unit and exclude positions that they could someday use as patronage,” said Bayer to the State Journal-Register.

Bayer told members that AFSCME would negotiate with the Quinn administration in hopes of reaching a compromise that would at least protect the right to union membership for those who have already joined.

But he said that a fair compromise would require a large mobilization by union members. He urged members to contact their senators and tell them to contact Sen. Harmon and senate leader John Cullerton with the message that their constituents want fair changes to SB 1566.

“This is a bad bill from our point of view,” Bayer said to the State Journal Register. “We hope we can improve on it substantially (through negotiations).”

IG Metall: Europe needs solidarity, not austerity

Early in December, IG Metall, Germany’s and the world’s largest trade union, hosted a conference in Berlin where trade unionists, academics, and politicians from 60 countries gathered to lay out alternatives to European austerity measures that have created such misery throughout the continent.

The main message of the conference was that solidarity rather than austerity should be the guiding principle for overcoming the effects of the continent’s current economic crisis and for building a new Europe.

“We want a Europe based on solidarity, whose citizens stand by one another during crises in particular,” reads a declaration by the conference. “We call for a Marshall Plan for the countries affected by the crisis. We want a world economic order that is rooted in solidarity, provides everyone with fair opportunities, and gives them equal life opportunities.”

Speaking at the conference, James Galbraith, an economics professor at the University of Texas at Austin, said that the austerity measures imposed on countries like Greece, Spain, and Portugal are exacerbating the crisis and fueling desperation which could lead to a downward spiral of violence and chaos.

Galbraith praised a document published last October by IG Metall’s executive board as a viable alternative to austerity and the chaos that may result from it.

The document entitled “Change of Course for European Solidarity” proposes a new vision of Europe based on solidarity, joint liability, an enhanced social pact that improves wages and security and ends social divisions, more regulation of financial markets, and more worker participation in the economic and political decisions that affect their lives.

The document lays out an alternative economic course for a more unified, democratic, and prosperous Europe. It calls for a continent-wide industrial and economic policy that converts the European economy from one that is at the mercy of financial markets to one that is socially and ecologically sustainable. Among other things, such an economy would distribute wealth fairly, make industry more energy efficient, transition to renewable energy, and embrace demographic change. Workers and their trade unions would have prominent voices in shaping policies that bring about this change.

“Only the prospect of an economically strong, environmentally and socially sustainable and democratic Europe can help overcome the deep identity crisis among citizens in the process of integration,” reads the document.

According to “Change the Course,” the public sector needs to play an enhanced role in the new economy by making substantial investments in education, training, research and development, and infrastructure.

Economic policy that sets social and environmental targets must be made at the level of the European Union, which will soon include 28 nations, rather than national governments. The working class should directly participate in how these targets are set. At the company level, co-determination, the active participation by workers in setting company goals and priorities, must be strengthened and expanded.

A more sustainable economy would also limit precarious work, low-paid temporary employment that provides little if any social benefits. “A new order in the European labor market is called for,” reads “Change the Course. “This must not only protect and promote secure jobs covered by wage agreements, but also help to discourage (jobs) of the precarious nature.”

Another important piece of IG Metall’s new vision is joint liability for the debts that poorer European countries incurred as a result to the economic crisis.

The document’s joint liability proposal calls for richer European countries to guarantee poorer countries’ public debt that exceeds 60 percent of Gross National Product. Such a guarantee would reduce the cost of borrowing and relieve some of the financial pressure on these countries.

Since risky financial speculation brought on the financial crisis that led to Europe’s economic crisis, financial markets should be more tightly regulated. Commercial and investment banks should be separated and governments should insure only the deposits of commercial banks. Short-selling should be banned, speculative activity regulated, and high-frequency trades restricted. There should also be a financial transaction tax among eurozone members to discourage speculative trading.

In order to integrate Europe, make its economy more sustainable, help poorer countries exit their economic malaise, and control financial speculation, Europe needs to expand democracy and increase worker participation at all levels. “IG Metall calls on Europe to turn to its workers again,” reads “Change of Course. “Too many people think that politics at the European Union level serves only corporations and the lobbyists. As a result, many workers see a united Europe as a threat to their well being.”

To combat this idea, worker participation in European Union policy development should be expanded, and the EU should include a social progress clause in its charter. Such a clause would include language that safeguards wages and social benefits in the richer countries, establishes a continent-wide set of minimum social standards, ends discrimination against women and migrants, and ends the expansion of low-pay sectors and wage disparity. “The same pay and same rights for the same work in the same place must be firmly established,” reads the document.

The Berlin conference in December gave IG Metall a chance to present the vision in “Change the Course” to a wider audience and to hear other alternatives to austerity policies. A declaration issued by the conference sums up the problems caused by the old order and envisions a new way to structure economies based on solidarity and social justice.

“The financial crisis that has plagued the global economy for the last four years shows us that financial market-driven capitalism is a mistake,” reads the declaration. . . . “Those in work must not become the plaything at the mercy of the economy. The economy is not an end in itself. It has to serve the needs of human beings and should be based on values such as solidarity, justice, dignity and respect.”