Mack, UAW Reach Tentative Labor Contract
This story appears in the May 25 print edition of Transport Topics.
Mack Trucks said it has reached a new tentative labor agreement with the United Auto Workers after more than 19 months of talks, which would cover about 1,700 employees at seven facilities in three states.
The proposed contract, which would replace the pact that expired in October 2007, would create a new entity to deal with health care issues, Mack said.
The new 40-month master agreement covers Mack’s entire unionized workforce and now goes to employee-union members who will vote on ratification. Mack made the announcement May 17, but several calls to the UAW by Transport Topics asking for confirmation were not returned.
The voluntary employee beneficiary agreement, referred to as a VEBA, “would permanently assume the sole obligation of providing retiree health benefits to current and future Mack-UAW retirees, spouses, surviving spouses and their dependents,” Mack said.
About two months after the old labor pact expired, “both sides agreed to extend the terms day-to-day until there was a new agreement,” said Mack spokesman John Mies.
Mies said he would not comment on issues related to the VEBA until after union members ratify the contract. He said he expects the UAW will schedule voting to take place over the next several weeks.
Mack’s statement said that its parent company, Swedish truck manufacturer Volvo AB, would fund the VEBA with $525 million in cash over a five-year period that would start July 1, 2010, at the earliest.
Volvo AB also owns Volvo Trucks North America, which assembles trucks in Dublin, Va. Mies said the labor proposal does not affect those VTNA employees, but it does cover the workers at the Volvo Powertrain plant in Hagerstown, Md., which makes engines for both Mack and Volvo.
The beneficiary association must be approved by the U.S. District Court for eastern Pennsylvania, Mack said. That process could take as long as a year.
The VEBA would be managed by the UAW as a trust, the company statement said.
The master agreement covers five union locals representing employees in Jacksonville, Fla.; three Pennsylvania cities; and two in Maryland.
The announcement of a tentative agreement was welcomed by a Mack dealer in New England, who said the manufacturer could now move on to address other issues.
“Volvo has been frozen on its plans, such as capital improvements and other investments, while this labor contract has been in the air. They negotiated for more than a year and were stymied; they couldn’t move,” said Jack McDevitt Jr., who sells Macks in New Hampshire and Massachusetts.
McDevitt also said he was pleased that Mack would continue to manufacture in the United States. He took issue with Navistar Inc. executive James Hebe, who said at a conference last month that U.S. truck factories are destined to give way to Mexican production (click here for previous story).
“The caliber of employee for Mack in the United States is the best in the industry, by far. I would prefer to go with the known entity of quality here rather than start all over in another country where you have to teach people to make a truck,” McDevitt said in response to Hebe’s speech.
“These people in the Lehigh Valley [Pa.] for Mack know how to build a truck,” McDevitt said.
