To end a two-year contract standoff with about 2,000 union members at its six Nabisco bakeries in the U.S., Mondelez International is offering to triple its proposed contract ratification bonus to $15,000 per employee. All workers would have to do to get that money is … let the company withdraw from their union’s pension plan and reduce their health insurance benefit.
It’s a limited-time-only offer, Mondelez labor relations director Pamela DiStefano said in an April 25 letter to Bakery Confectionery Tobacco and Grain Millers (BCTGM) vice president Jethro Head. The offer expires at midnight May 20.
“Give up your pension for $15,000? No thanks!” was the workers’ reaction, At the Portland, Ore., Nabisco bakery, a letter from the plant manager about the company contract offer got a chilly reaction. Union members wrote “Return to Sender,” “No thanks!!!!” and other messages on the unopened envelopes.
Is the company planning to impose its own contract offer after that? Laurie Guzzinati, Mondelez Global LLC’s senior director for corporate and government affairs for North America, wouldn’t say, but said in an email to the Labor Press that more than two years have passed since the previous contracts expired.
“During this time, the BCTGM has not allowed our employees the opportunity to vote on our offer,” Guzzinati wrote. Mondelez is Nabisco’s corporate parent. Its brands include Oreos.
BCTGM — which has rejected company proposals to withdraw from the pension — declined to respond to the Mondelez offer to triple the ratification bonus. That’s when the company began contacting employees directly, in what would appear to be a violation of federal labor law.
Employers aren’t supposed to negotiate directly with workers if they’re union-represented. But Mondelez, in letters and meetings with workers, is pitching the tripled bonus and urging them to put pressure on the union to allow a vote on it.
“[I] urge you to ask…your union representatives for the opportunity to vote as soon as possible on the company’s offer,” Portland bakery general manager Jan Beunder wrote in a May 3 letter to employees.
That’s not going to happen, said Ron Baker, International Strategic Campaign Coordinator for the BCTGM.
BCTGM Local 364 Vice President Leo Lovato said he witnessed cleaning crew workers at the Portland bakery rip their letters in half and throw them in the garbage — in full view of their foreman. Local 364 members had already heard about the company’s offer at an April 28 union meeting, so they knew what the letters were about.
“This is a baited offer,” said Local 364 Business Representative Cameron Taylor. “It’s giving it to you up front and then taking it away with increased health care costs and eliminated pensions.”
Instead of making new pension contributions, Mondelez is proposing to contribute an equivalent amount to a 401(k) retirement savings plan. The company says that’s a better deal, because the union-sponsored multi-employer pension plan is 12 years away from insolvency, according to the latest projections.
Once its assets are gone, retirees would get only a fraction of the benefits promised — funded by contributions from any remaining employers and from the federal Pension Benefit Guaranty Corporation. But BCTGM leaders are holding out hope that congressional action could rescue pension plans like theirs. They say once workers lose the pension, they likely would never get it back.
If Mondelez is allowed to withdraw from the pension, the company would be obligated to pay about $28.5 million a year for 20 years in withdrawal liability.
Mondelez cleared $2.9 billion in net income last year. Last November, it sent its retiring CEO Irene Rosenfeld off into her golden years after paying her $231 million for 11 years of leading the company.
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