General Dynamics - Metal Trades Council contract - Developments in Industrial Relations

Monthly Labor Review, Dec, 1988 by George Ruben

Full-scale production resumed at General Dynamics Corp.'s Electric Boat Division in Groton, CT, after members of 11 unions ratified a 46-month agreement, ending a 3-month work stoppage. The issue that triggered the dispute was Electric Boat's contention that the employees should settle for a moderate compensation gain to enable the company to compete more effectively with Newport News (VA) Shipbuilding and Drydock for U.S. Navy production contracts for submarines. According to Electric Boat, the Virginia shipbuilder had a Labor cost advantage of $1.24 an hour, which had enabled it to win several recent Navy production contracts.

A major part of Electric Boat's moderation proposal was for employees to accept lump-sum payments in lieu of wage increases, which would hold down the rise in compensation because it would not trigger rises in those benefits that are contingent on wage rates. This was resisted by the unions, which bargained as a Metal Trades Council, because the workers had accepted two lump sums under the previous agreement-$150 and 4 percent (of each employee's earnings during a 12-month period), as well as 4-percent and 3-percent wage increases.

The 1988 accord provides for an immediate lump-sum payment equal to 5 percent of the employee's earnings for a 12-month period, followed by a December 1989 payment calculated at a 4-percent rate, a flat $600 payment in December 1989, and a 3-percent wage increase in April 1991. At the time of the settlement, the top pay rate was $12.07 an hour.

The hospital-medical-surgical plan for employees was replaced by a "comprehensive" plan that pays 80 percent of covered charges (95 percent for hospital room and board and related charges), and has annual deductibles of $100 per person and $200 per family; a $750 per person annual limit on out-of-pocket expenses, with the plan covering the full cost for the balance of the year and all of the following year; and a $500,000 lifetime benefits limit per person. The employee's share of the premium cost for health and basic life insurance was increased to $2 a week for single coverage and $4 for family coverage. There also were improvements in the existing plan for retirees.

Among the changes in the pension plan was an increase in the normal benefit rate to $20 a month for each year of credited service (formerly $18) for employees retiring after August 31, 1991.