Union and Wabtec remain far apart on wage issues as contract talks enter final phase
Jim MartinAfter a month of negotiations, Wabtec Corp. and its union workforce in Erie have found common ground on a growing list of negotiating points.
But the two parties have a long way to go on financial issues, according to online updates posted by the Pittsburgh-based company that purchased GE Transportation in February of 2019.
More:Wabtec says contract talks with union workforce in Erie have been 'productive'
Separated by money
On April 27, early in the negotiations process, Wabtec proposed a three-year contract that would include one 2% raise and three lump-sum payments of $1,500 each to be paid during the life of the contract.
The union has a different vision.
In a proposal submitted Thursday, Locals 506 and 618 of the United Electrical, Radio and Machine Workers of America proposed a 12% pay raise in the first year and raises of 6% in each of the next three years.
The union also is proposing a cost-of-living increase that would provide an additional 1 cent an hour for every .071429 of 1% that the consumer price index increases.
Scott Slawson, president of UE Local 506, which represents most of the plant's 1,400 or so union workers at the plant in Lawrence Park Township, said he understands that it might sound like the union is asking a lot.
But Slawson, whose union agreed to forgo a cost-of-living increase in its last four-year contract, said the union's proposal is designed in part to make up for earning power that has been lost due to historic inflation.
More:Wabtec-union negotiations set to begin; both sides hopeful about talks
"Inflation has compounded exponentially since 2019 to the point where we have lost about 19 cents on every dollar," Slawson said.
A 12% raise in the first year is designed to make up some of that lost ground, he said.
"When you haven't had a pay raise in four years and no cost-of-living (increase), your buying power goes down. The whole community suffers from that," Slawson said.
A key component of the UE's initial contact with Wabtec — reached only after a nine-day work stoppage — was that the union agreed to a progressive wage scale. While existing employees would continue to earn an average of $35 an hour, new employees would be paid an average of $22 an hour.
More:Wabtec wins $1 billion order; what does it mean for Erie plant?
Wabtec's original proposal called for maintaining a separate wage structure. But ultimately, the UE and the company agreed that new employees would have the opportunity to work up to full wages over 10 years.
In its latest proposal, the union is calling for the elimination of that progressive wage scale.
Slawson has said it creates an uncomfortable situation when people doing the same job are earning different amounts. He also said the lower starting wages have led to higher rates of attrition.
"Our belief is that it's just not sustainable," Slawson said, particularly at a time when average wages have increased dramatically.
Slawson said the union has proposed an alternative that takes into account the cost of hiring and training new employees. The union's plan calls for new employees to be hired at 90% of a normal wage. After a six-month probationary period, their wages would increase in line with other employees.
The case for a pay hike
Before negotiations began, Slawson cited a recent contract signing by workers at Caterpillar Inc. — one of Wabtec's top competitors in the freight locomotive business — as evidence that a substantial pay raise is in order.
According to the Associated Press, the Caterpillar contract, which covers 7,000 employees, includes a $6,000 ratification bonus, a 7% immediate pay raise and 4% wage increases for each of the next three years. The contract also provides for two 4% lump-sum payments during the life of the agreement.
Wabtec, which has been providing regular updates on a website dedicated to negotiations progress, addressed directly the issue of the Caterpillar contract.
"CAT’s recent contract is a good step up for their employees, but your compensation is higher here," Wabtec said on its negotiations website.
"CAT’s production workers’ wages start at $17.00/hour under the new agreement and will be $20.47/hour in 2028. So even at the end of their new contract, CAT workers will be paid less than the Erie Production Tech’s current starting wage. And employees in Erie already have a well-documented path to higher pay in the current contract. In addition to wages, employees at Wabtec receive a total compensation package, including benefits and overtime, that is among the best in Erie."
Swapping proposals
Negotiations, which were not held on Friday, are expected to resume Tuesday.
"After a month of bargaining, the UE has presented all of its non-economic proposals as well as its first complete economic proposal," Wabtec said on its website. "The company is studying the UE’s proposals and will respond when negotiations resume after the holiday weekend."
More:UE president at Wabtec: 'It's important that we get this right and that we deliver'
Asked Friday about the progress of the talks, Slawson said, "I would say at this point both sides are right where they expected to be. You enter (negotiations) hopeful and remain hopeful. I think both sides are working diligently to work through issues."
Slawson has never taken off the table the possibility that the union could strike if it doesn't come to terms with the company. However, the contract the union and Wabtec signed four years ago includes an agreement that workers will not be locked out for the duration of the contract and that union members will not strike.
The current contract, including that agreement, expires June 9.
Contact Jim Martin at jmartin@timesnews.com.