The Definition of a SCAB

The Strike is Over


Press Release 1:00pm PDT July 9, 2007

At a meeting held today, IAM members employed at Freightliner voted to accept the Company’s latest contract offer after being on strike since July 3rd. This offer will provide increased compensation to the employees while helping to put the plant on a sound footing for a viable future in Portland. The addition of job security language in the Company’s final offer will provide a sense of security for the employees in the future. Members will be returning to work on their regularly assigned shifts starting today with swing shift at 2:45 pm and tomorrow with day shift a 6:15 am.

Highlights of the three-year agreement include: Increases in wages and pension which will result in a 9.06% increase over the term of the agreement; lump sum bonus of $1000 payable to all active employees on the payroll as of 7/16/07, new gainsharing program; and an average of 38% decrease in employee premium contributions on health and welfare.


Your Negotiating Committee met with Freightliner on July 5 and was successful in achieving an improved proposal for your vote.  The vote will be scheduled for Monday, July 9, 2007, 9:00 A.M. at Mount Hood Community College.


The Company is making this offer a last, best and final offer.  The offer included all the economic improvements that we had to vote on before.  But it is clear that we will not be able to make any further improvements or changes.  This is the best offer that we will have to consider. 


We have new proposed language on job security issues that are a major concern for the members.  A successor clause which will protect the members if the Western Star Truck Plant is sold is now a part of the proposal.  If the plant would be shut down, there is improved language whereby the Company will be negotiating in good faith to provide severance payments. 


There is no change to the proposed language on retiree health care beyond the age of 65.  Because of confusion on this issue, the Committee is providing answers to frequent questions on the subject.  The rest of the economic proposal also remains the same.  This still includes the signing bonus and the payment of holiday pay for July 4.  The signing bonus and the July 4th holiday pay are contingent on ratifying this on Monday. 


The negotiation committee fully recommends this proposal without reservation.


Members assigned to picket duty from 4:00 a.m. to 8:00 a.m. Monday July 9th should report for their assignment and not leave for the meeting until they are relieved.  Members currently assigned to picket duty for 8:00 a.m. Monday July 9th will be excused from the assignment and alternate picketers will be in your place. 


More information will follow. Please check the hot line, 503-239-4800 and the web site.


In Union solidarity, we remain fraternally yours


                                                Your IAM Negotiating Committee                               



Dick Carlson                                                       Frank Rouse



          Fred MacKenzie                                        Gene McGlothlin

Freightliner – Q. & A.



Q.        I do not meet the 50-years old and 20-years of service requirements, will I have retirement medical benefits after I retire?


A.        Yes.  All employees currently working will receive full retirement medical benefits until age 65.


Q.        What happens after age 65 for people that will not be covered by the Company supplemental medical insurance?


A.        Medicare takes over, you will have the option of purchasing additional supplemental coverage.


Q.        I do not meet the 50/20 requirements, how much will I have to pay for supplemental/medical insurance after age 65.


A.        It varies.  Anywhere from the $80.00 additional on up, depending on what supplemental coverage you choose per person.


Q.        I plan to retire soon but I do not meet the 50/20 company requirements, will I be covered after age 65?


A.        Yes.  All current employees who retire before January 1, 2008, will be covered in full after age 65 subject to the current cost sharing matrix for retiree medical benefits.


Q.        Did the Company take anything back from the initial contract proposal?


A.        No.  All of the original economic package remains the same, including wage increase, pension increase, medical premium reduction and signing bonus.  Additionally the Union negotiated and received improved language on successor and severance concerns. 


Q.        Will we receive holiday pay for the 4th of July?


A.        Yes, we will receive holiday pay if we ratify this contract proposal?


Q.        Does the Union and Negotiating Committee recommend the contract?


A.        Yes.  The Negotiating Committee fully recommends this contract.


Q.        How does this contract affect current Freightliner retirees? 


A.        There are no changes to current retirees.  After age 65, Medicare takes over and the Company pays the supplemental  medical coverage like it always has.



     Summary of Economic Benefit of Current Offer       
 Hourly Rate   Base Annual Income  Increase in Annual Base Income    
Thru 6/30/2007  $   21.55 $44,824.00 $0    
Contract Year 1  $   22.25 $46,280.00 $1,456.00    
Contract Year 2  $   22.75 $47,320.00 $2,496.00    
Contract Year 3  $   23.25 $48,360.00 $3,536.00    
 Total Wage Benefit      $7,488.00    
 Hourly   Monthly  Annually    
Thru 6/30/2007  $     3.85        
7/7/2007  $     3.95        
1/5/2008  $     4.05 $312.00 Additional Contribution Yr 1    
7/5/2008  $     4.15        
1/3/2009  $     4.25 $728.00 Additional Contribution Yr 2    
7/4/2009  $     4.35        
1/2/2010  $     4.45 $1,148.00 Additional Contribution Yr 3    
Increase in Pension Contributions is $2184.00 Over Life of Contract.     
     HEALTH & WELFARE       
 Single   2-Person  Family    
Thru 6/30/2007 $40.00 $90.00 $130.00    
As of 7/1/2007 $25.00 $55.00 $80.00    
Monthly Savings $15.00 $35.00 $50.00    
Annual Savings  $ 180.00 $420.00 $600.00    
Total Monetary Gain Over Life of Contract:       
Top Rate Single Medical:  $10,212.00      
Top Rate 2-Person Medical: $10,932.00      
Top Rate Family Medical:  $11,472.00      


There is a new contract proposal to be voted on Monday 7-9-2007 at 9:00 AM at Mount Hood Community College. Please read this page carefully, the new contract proposal is below.

Portland Truck Manufacturing Plant

Last, Best and Final Economic Proposal

July 5, 2007


The Company reserves the right to withdraw or modify these proposals should the parties fail to reach agreement on all matters addressed by the parties during the negotiations.


Wages and Hours




2007:   $0.70 per hour to Top Rate only effective pay period ending July 7, 2007


2008:   $0.50 per hour to Top Rate only effective pay period ending July 5, 2008


2009:   $0.50 per hour to Top Rate only effective pay period ending July 4, 2009


Lump Sum Bonus


A lump sum bonus of $1,000 will be paid to all active employees on the payroll as of July 16, 2007.


Special Premiums


The classifications of Production Technician, Continuous Improvement Facilitator, and DCPS Implementation Team Member will receive a 5% premium above the top rate of their classification consistent with the letter on Daimler Production System/Total Productive Maintenance agreed to by the parties.  Employees currently holding temporary assignments in these classifications as acknowledged by the unions and the company and currently receiving a 10% premium will be grandfathered until such time that the assignment ends.


PDI Classifications- The Company has outlined its intent to include PDI employees in the 2007 bargaining agreement in a Letter of Understanding with the I.A.M.   The focus of the LOU is on maintaining operating efficiencies and flexibility and cost competitiveness.


Overtime Administration (I.A.M., Teamsters, and Painters)


If production needs warrant, the Employer may utilize up to 10 hours of mandatory overtime per month.


If overtime is required, the Employer will first seek volunteers in accordance with the collective bargaining agreement.  If the Employer does not find a sufficient number of volunteers, employees may be mandated in the inverse order of seniority until a sufficient number has been achieved.


Mandatory overtime shall be limited to 2 hours a day Monday – Friday only (excluding holidays).


If daily overtime is scheduled, then cancelled by the Employer, the hours scheduled will count towards the 10 hours of overtime per month.


If daily overtime is required, employees will be notified by the end of their prior shift. 


The provisions of the Article that restrict the right of the Company to mandate any overtime work may be suspended, by mutual agreement (of the designated representatives of each union party to this agreement), if operations are interrupted by emergency situations such as acts of God; because of major equipment breakdowns, government mandated work, regulatory training, and annual inventory.


Employees may not refuse scheduled work without a justifiable reason.


The attendance control program provisions will apply to employees who fail to report to work for mandatory, accepted voluntary, and accepted scheduled overtime.


Gainsharing Program


See attachment.




The current Holiday Schedule is proposed without change.  Recognized Holidays are:


Good Friday

Memorial Day

Independence Day

Labor Day

Veteran’s Day

Thanksgiving Day

Day after Thanksgiving


In 2007 - 2008 Contract Year, the Employer agrees to recognize December 24, 25, 26, 27, 28, 31; and January 1


In 2008 - 2009 Contract Year, the Employer agrees to recognize December 24, 25, 26, 29, 30, 31; and January 1, 2


In 2009 - 2010 Contract Year, the Employer agrees to recognize December 24, 25, 28, 29, 30, 31; and January 1




No change to current vacation schedule.


Health & Welfare


Active and Retiree health care costs represent a significant portion of overall labor costs.  Health care costs continue to increase at a pace higher than inflation.  Additionally, the market place continues to change in both the private and federal sectors.  Many new programs have been developed recently that, if taken advantage of, would assist in the reduction of health care costs. In an effort to address the labor cost issue at the Portland TMP, the following active and retiree medical proposals are put forth: 


1.  Active Employee Medical Program – plan modifications described below will become effective 30 days after the effective date of the contract unless otherwise noted.


Medical Plan


Increase office visit copayment from $10 to $15



Dental Plan


Maintain current program


Vision Program:

        Optometrist                                             Cover in Full (with $25 co-pay)

        Ophthalmologist                                      Cover in Full (with $25 co-pay)

        Single-vision Lenses                               $75.00 (Every 12 Months)

        Bifocal Lenses                                        $100.00 (Every 12 Months)

        Trifocal Lenses                                       $125.00 (Every 12 Months)

        Lenticular Lenses                                    $150.00 (Every 12 Months)


        Frames                                                    $75.00 (Every 24 Months)

        Contacts (Regular)                                 $215.00 (Every 12 Months)

        Contacts (Medically Necessary)            $250.00


            All except frames                                Once Per Year

            Frames                                                Once Each 24 Months


Employee Premium Contributions

Single                 $25   Per Month (from $40)

2 –Person           $55   Per Month (from $90)

Family                $80   Per Month (from $130)


Note: Employer will continue to pay actual premium amounts above employee premium contributions.


2.      Same-Sex Domestic Partner Benefits- Effective January 1, 2008, change health care eligibility to include same-sex domestic partners.


3.   Retiree Medical Program


In recognition of current trends in industry benefit plans and the introduction of new federal heath care programs, the company’s participation in post-age 65 retiree health care will be discontinued with the following exceptions: 


1)      Employees age 50 or older and who have at least 20 or more years of service as of July 1, 2010 will be grandfathered and continue to receive post-age 65 retiree health care benefits in retirement as a feature of this agreement.


2)      Employees retiring prior to January 1, 2008 will be grandfathered and continue to receive post-age 65 retiree health care benefits in retirement as a feature of this agreement.


3)      Employees who retired prior to July 1, 2007 are not affected by the above agreements.


Disability Plan


Increase weekly disability payment to $300 for the first 4 weeks and $350 for the next 22 weeks.


Voluntary Benefit Program

The company will offer a voluntary benefit program which includes a Long Term Disability option.  The program will be offered by January 1, 2008.


Pension Program


Increase Pension contributions as follows:

Year 1             $0.10 / hour increase effective July 7, 2007

                        $0.10 / hour increase effective January 5, 2008


Year 2             $0.10 / hour increase effective July 5, 2008

                        $0.10 / hour increase effective January 3, 2009


Year 3             $0.10 / hour increase effective July 4, 2009

                        $0.10 / hour increase effective January 2, 2010





Employees shall be excused with pay for five (5) days:


Spouse                        Stepchild

Parent                                     Brother

Child                            Sister


Employees shall be excused with pay for three (3) days for:


Stepmother                 Grandparents

Stepfather                   Grandchild

Father-in-law               Bother/Sister of Spouse

Mother-in-law              Son/Daughter-in-law


Employees shall be excused with pay for one day (1) for:


Great-Grandparent     Stepparents of spouse

Great -Grandchild       Spouse’s Grandparent



Safety Shoes


Increase safety shoe benefit to $90 per year.


Corrective (Prescription) Safety Glasses


Reimbursement for corrective/prescription safety glasses will be increased to a maximum of $125.00 per year.





Job-Related Physical Examinations


Employees required by the Company to report for job-related physical examiniations shall be compensated for actual time utilized at straight time rate up to a maximum of 2 hours.


Successor and Severance Pay


Add to the collective bargaining agreement the attached Successor and Severance Pay language.


Duration of Agreement


The new agreement is proposed to expire on June 30, 2010.


Tentative Agreement -Successors


This Agreement will be binding upon both parties, their successors and assigns.  In the event of a sale or transfer of the business of the Employer, or any part thereof, the purchaser or transferee shall be bound by this Agreement.


Tentative Agreement - Severance


As a result of discussions between the parties during 2007 negotiations, the Employer acknowledges its responsibility to advise the Union of its intent to close the plant if economic conditions or other significant factors impede the Company’s ability to produce a competitive product at a profit.


Both the Employer and the Union acknowledge that the future viability of the Portland plant and long-term job security for employees depends upon their ability to work cooperatively on matters which positively impact quality, efficiency and cost.  Further the parties understand the need for the products to be competitive for the Portland plant to be profitable.


In the event of a closure of the Portland Truck Manufacturing Plant, the Employer shall advise the Union and, in a timely manner, make a good faith effort to reach an agreement regarding severance payments.









A.        Objective


The objective of the program is to maintain focus on key business activities and empower employees by providing an opportunity to share in performance benefits related to specific business metrics.


B.       The Program


The program is designed to provide quarterly payments to employees based on the achievement of quality and productivity objectives. Each quarter quality performance will be measured by the Plant APA and EOL quality audit scores.  Performance on the plant APA and EOL quality audit score must be at or below the quarterly target to create the opportunity for a Gainsharing payment. Provided the APA and EOL quality audit score is at or below the quarterly target performance, the productivity metric will determine the actual Gainsharing payment.  Payments will be made consistent with a scale of productivity performance based on a quarterly Target, Threshold, and Maximum.  (see Appendix A) A set payment will apply to performance between Threshold and Target.  An increasing payment scale will apply to performance between Target and Maximum. 


Payments will be paid to eligible employees as defined in Paragraph D by the last pay period of April (Q1 results), July (Q2 results), October (Q3 results), and January (Q4 results).


C.       Definitions


1)  APA Quality audit score – required vehicle audits established by Corporate Quality Assurance for trucks deemed deliverable to the customer.

2)   EOL Quality audit score- required vehicle audits established by Corporate Quality Assurance for trucks produced from the end of the production line.

3)  Productivity – labor efficiency determined by combined direct and indirect labor hours worked measured against standard hours.


D.       Eligible Employees


1)  Bargaining Unit employees who have completed initial probation period.

2)  In the event of the death of an employee prior to Gainsharing payment, the payment   will be made to the designated beneficiary.

3)  Employees on Long-term and Short-term disability may be eligible for a Gainsharing payment based on date of disability.

4)  Retirees may be eligible for a Gainsharing payment based on date of retirement.



E.      Effective Date


The program shall become effective January 1, 2008 with the first eligibility for payment being on the first full quarter of the year (first quarter 2008 performance with payment, if applicable in April 2008).




A.    Partial payments to Employees


Employees who retire, die, or become disabled (Long-term and Short-term disability) during the program year will be eligible to receive a partial Gainsharing payment earned during the quarter based on the date of retirement, disability or death.


A complete calendar quarter is defined as 13 weeks.  In the event of death, disability, or retirement requiring a partial pro-rated payment, the employee will be given credit for the entire week in which the event occurred. 



·      The calendar quarter begins on January 1, 2008.

·      Employee A is an active employee until February 13, 2008.

·      On February 14, 2008 employee A becomes disabled and qualifies for short-term disability until March 31, 2008. 

·      It is determined a Gainsharing payment will be disbursed to the workforce based on quality and productivity of the 1st calendar quarter. 

·      Employee A is eligible to receive a partial payment in the amount of 7/13 of the total Gainsharing payment.


Should a new hire complete the probationary period during one quarter and their original hire date be in the previous quarter the payout will be retroactive back to the beginning of the quarter in which the employee completed the 45-day probation period.


B. Termination of Employment


If an employee terminates employment for reasons other than retirement or death, they will be ineligible for a Gainsharing payment.


C. APA and EOL Quality Audit Inspection and Scoring Procedure


Audit trucks will be selected at random for the APA and EOL quality audit by the auditors. The selected vehicles must be factory released but prior to PDI inspection.


A designated bargaining unit employee will perform the APA audit per the established APA audit procedures and inspection guidelines. The auditor will record all discrepancies found and load the inspection results into the APA audit system.  The system will automatically score the audit discrepancies based on the severity scoring weights.


Two (2) APA audits and one (1) EOL audit from each shift, each day of production will be audited for the gain sharing program. The percentage of model mix required to be audited for the gain sharing program will match the current build model mix.


Audit averages will be rounded down to the nearest tenth (1/10) of a point.


The audited trucks will be placed in a designated location for all employees to review. Audit results will be posted with the truck. 





D.  Plan Implementation


The parties recognize Gainsharing is a new concept for the Portland TMP.  In cases where a new concept is introduced, issues may arise which could not be anticipated by the parties during negotiations.  In light of this, management and the unions agree to make a good faith effort to resolve these issues.



























                                                            2008               2009               2010

WST APA                                          34.2                32.5                30.9

Mil APA                                              15.7                14.9                14.2


WST EOL                                          63.2                60                    57

MiL EOL                                             49.7                47.2                44.9                                                                                             




                        Criteria                                               Threshold                  Target                         Maximum


                        Overall Labor Efficiency                     90%                       100%                         108%





QUARTERLY PAYMENT TOTAL:                          $100                       $250                            $400



NOTE: Actual performance in between Threshold and Target will generate a payment of $100.  Actual performance between Target and Maximum will generate a payment proportional to that performance level.  Performance below Threshold for any performance measurement will generate no payment.  Payments will not exceed the Maximum established for the measurement.


Contract Proposal Summery