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IBT Members Ratify Four-Year Contract With Sikorsky Aircraft for 4,500 Employees

Monday, December 23, 2013
By Rhonda Smith

Dec. 20 -- Members of the International Brotherhood of Teamsters Dec. 15 overwhelmingly ratified a new four-year contract with Sikorsky Aircraft Corp. that provides wage increases of 10 percent over term, a $4,000 ratification bonus and up to 20 percent more in employer pension contributions, a union official told BNA Dec. 20.

The contract took effect Dec. 16 and expires Feb. 18, 2018. Members of IBT Local 1150 approved it by a vote of 2,098 to 66.

Local 1150 Secretary-Treasurer Rocco Calo said the contract covers some 4,500 Sikorsky Aircraft employees, the majority of whom work at the company's facilities in Stratford, Bridgeport and Shelton, Conn. About 750 of the employees in the bargaining unit work in West Palm Beach, Fla.

Stratford, Conn.-based Sikorsky designs, manufactures and services helicopters, including the Black Hawk and the presidential helicopter. The company is a subsidiary of United Technologies Corp.

“Because of what we do, sequestration created a lot of headaches for everybody. The government is our biggest customer,” Calo said. “They're up against some pretty tight budget restraints, and we're feeling the effects of that. Being able to get this done early, and getting the money we did, is a win-win for everybody.”

Sikorsky officials said in a statement Dec. 20 that ratification of the contract “concluded productive negotiations in which both sides worked hard to reach an agreement that is fair to our employees while helping Sikorsky to remain competitive.”

The ratification took place two months ahead of the expiration of the previous contract, which was ratified in February 2009 (30 DLR A-11, 2/18/09).

The company in the statement said the new contract “provides labor stability in the midst of a challenging and uncertain economic time for Sikorsky, its customers, and its suppliers.”

Wage Increase and Bonus.
Calo said the contract provides annual wage increases for all IBT-represented workers of 2.5 percent each year it is in effect. The previous contract provided wage increases of 3.5 percent in each of the first three years and increases of 4 percent in each of the last two years.

The average salary at the plant today is $37.50 per hour, Calo said, adding that the 2.5 percent wage increase will mean about an additional $1 per hour for employees.

Workers will receive the $4,000 ratification bonus in separate $2,000 payments, in January 2014 and in February 2015.

“I split it up like this because with our bonuses we have the option of contributing it directly to our savings plan with a 50 percent match by the employer,” Calo said.

Calo said if employees decide to put the bonuses into a company savings plan or health savings account, they may contribute increments of $250, and Sikorsky would match 50 percent of the employee contribution.

COLA, Retirement Benefit Increases.
The contract continues to call for semiannual cost-of-living adjustments, with a maximum payout of 18 cents an hour for each adjustment, Calo said.

Sikorsky also agreed to annual increases in its 50 percent match to employee contributions to the company's 401(k) plan, Calo said. Prior to the ratification, the maximum amount of 401(k) contributions the company would match was $72 per week. The maximum contribution will rise $2 per week in each year to $80 per week in the last year of the contract term, he said.

As for pension benefits, the ratified agreement increases the multiplier for the defined benefit plan from $65 per month per year of service to $72 per month in the first year and to $75 per month in the third year.

In addition, the payment to the cash balance pension plan for employees will rise to $1.20 an hour, from $1 an hour, Calo said.

Health Plan Changes.
Under the contract, workers have the option of choosing from one of five employer-sponsored health care plans. Sikorsky offers two conventional “80/20” health plans, Calo said, and one has a higher deductible than the other.

The company also offers three high-deductible health plans with health savings accounts tied to them. Two of the high-deductible health plans are new, Calo said, and are part of an ongoing effort by both parties to rein in health care costs. “Our medical plans are running on the family side, probably $26,000 a year,” Calo said.

The cost to participate in the health plans increased slightly, he said, but any increases in weekly premiums, annual deductibles or out-of-pocket maximums do not take effect until Jan. 1, 2015.

To help offset the costs of retirement, the parties agreed to continue providing an individual medical account, which employees can use to help pay their medical expenses. Under the contract, the company provides a 75 percent match of tax-deferred contributions from the employee that range between $1 and $20 per week, depending on the worker's age.

Under the contract, the allowable tax-deferred contribution for employees under age 50 is $1 to $13 per week. For workers ages 50 to 54, the allowable contribution is $1 to $18 per week. For employees ages 55 to 59, the allowable contribution is $1 to $19 per week. For employees 60 and older, the allowable contribution is $1 to $20 per week.

“This is another 401(k)-type plan that gives older workers a chance to catch up a little bit more,” Calo said, by putting aside money they might need later on for health care expenses.

When Sikorsky and the Teamsters bargained in 2006, union members held a six-week strike before agreeing to a three-year contract (64 DLR A-2, 4/4/06).

This time, Calo said, “workers got decent raises--and early. This gives the company the ability to go back to a potential customer and say 'We've locked in with the union and have labor peace for four years.' That's a big selling point to a lot of customers.”

To contact the reporter on this story: Rhonda Smith in Washington at rsmith@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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