In an opening salvo of contract talks, Pratt & Whitney management is asking the Machinist union to give up 252 jobs at the East Hartford and Middletown plants, clearing the way for the company to bring in outside contractors for materials handling work on the shop floors.
The number is included in a one-page flier (PDF here) that the union is giving to its members Thursday, based on negotiations Tuesday and Wednesday.
The flier also said the union was told by Bennett Croswell, the Pratt military engines chief, that the ramp-up for the f135 engine for the F-35 Joint Strike Fighter will not happen until 2016, rather than 2015 as planned. That engine is already in production in Connecticut and it’s unclear what the delay, or the ramp-up, will mean for jobs.
Although the 252-job figure is just a starting point in talks that will intensify as the Dec. 8 contract expiration approaches, the proposal shows the direction Pratt plans to take. As the company moves deeper into the next-generation geared turbofan commercial engines and the f135 military work, its goal is to further outsource work to contractors that isn’t a core function, and to disperse company work to more sites around the world.
Both of these trends have been happening for years, angering union leaders in Connecticut, the most expensive place where Pratt has regular production.
Pratt’s hourly ranks have steadily thinned, mostly through retirements but with some layoffs, to about 2,700, divided equally in Middletown and East Hartford. The number is down from 3,400 three years ago, when the current contract was sealed, and is down from about 27,000 25 years ago, before a crushing series of cuts in the 1990-93 recession.
With those numbers in mind, the Machinist union has made job security far and away the primary issue in the talks. The union has already posted a strike picket assignment schedule starting Dec. 9, complete with names and shifts — a common tactic in contract negotiations.
Pratt has also taken pre-strike measures, preparing salaried employees to operate machines.
The union calls the plan “despicable” as some members charge the United Technologies Corp. unit with greedily padding profits while it pays executives richly.
The company insists it must cut costs aggressively as it competes fiercely with General Electric and Rolls Royce for new-generation engine sales, as Pentagon budgets tighten and as the company endures a delay of two to three more years before high-volume production kicks in.
A typical union member makes $90,000 a year — a figure that can be reached with a base rate of $36 an hour and eight hours a week of overtime.
But the outsourcing of material handling it’s not just about saving money. Bringing in a large logistics firm to move parts, assemblies, components and finished engines around the Pratt complexes could be seen as part of the company’s ongoing effort to focus on its core function of developing and making engines. Companies such as FedEx and UPS have boosted their in-factory services for manufacturers, making a switchover more viable.
Until now, much of the argument between Pratt and the Machinists has been about moving work to locations outside of Connecticut. A provision known as Letter 22 prevents the company from moving union work on the existing generation of engines, unless the Connecticut plants lack capacity to do that work.
The issue of replacing union workers with outside contractors on the shop floor could be equally explosive — and is also protected under the current contract, for work on the existing generation of engines. The company has done it in years past, notably in the “cribs” where tools and supplies are handled, and among skilled tradespeople such as electricians. The outside contractors, known as “yellow badges” for the ID’s they wear, typically earn less than union workers.
But the company has rarely if ever laid off union workers whose jobs were replaced by contractors, instead typically making the new hires after retirements, or transferring affected workers. And while it’s too early to know whether Pratt’s current proposal would mean layoffs, many of the materials handlers who would be affected have little or no experience in regular production, a source familiar with operations said.
“It is early in negotiations brothers and sisters but the company is heading down a slippery slope,” today’s flier said.
It may be a slippery slope but it’s not a one-way road. As a negotiation tactic, the union could, for example, allow the company to take back the 252 jobs in exchange for protecting jobs in the f135 and geared turbofan programs — jobs that are not now covered under Letter 22.
The flier also said weekly health insurance premiums would increase. Health care costs were a significant issue in 2001, when the union had a strike that lasted several weeks. In its memo to employees late Wednesday, Pratt said it is urging workers to use a high-deductible, lower cost plan rather than the more costly, full-coverage ConnectiCare plan.
Pratt and leadership of the International Association of Machinists and Aerospace Workers have agreed not to talk publicly about the negotiations.