ANDOVER, Mass., Aug. 27 /PRNewswire/ -- We are surprised and disappointed
by the vote to reject Raytheon's proposed contract. We really don't
understand why the package was rejected. We hope our employees had adequate
information on the entire offer and adequate time to thoughtfully consider the
details before making their decision. The contract proposal is comprehensive
and addresses the substantive issues brought to the table by the union.
-- The union wanted a comprehensive wage package. We delivered.
Currently, IBEW 1505 members are paid on average 25 percent more than
the local market for similar work. Voluntary attrition is less than
1 percent. More than 70 percent are paid above the rate of their
assigned job. Raytheon's offer delivers four general wage increases
totaling a compounded 14.7 percent. All of these increases went into
employee base pay. The average employee currently earns $39,832 in
base wages; with overtime and company paid benefits that average
employee earns $53,030 in total compensation. By the fourth year of
the proposed contract, average base wages would increase to $45,718,
and, with typical overtime and the enhanced benefit package, total
compensation would rise to $64,236.
-- The union wanted reasonable healthcare cost sharing. We delivered. We
offered a $1,500 contract bonus in September to pay for the increased
cost of healthcare insurance. The average increase in weekly employee
contribution over the four-year term is $6.62, which is essentially
covered by the contract bonus. Over the last five years, Raytheon and
its employees in Massachusetts have benefited from a multiyear contract
that has kept health care costs lower than the regional and national
averages. That meant lower premiums for our employees. That agreement
is no longer available through any of our insurance carriers. However,
the company's contract offer keeps IBEW members paying substantially
less than other plan participants.
-- The union wanted pension enhancements. We delivered. Raytheon's offer
included improvement in the minimum pension benefit formula in each
year of the contract. Combined with the general wage increase, the
average accrued pension benefit would increase by 31.6 percent over the
term of the agreement. This enhances what is already considered to be
a highly competitive employee benefits package.
-- The union wanted job security through program assurances. We
delivered. On the issue of job security, we agreed to continue program
assurances for Patriot, Hawk, AEGIS and GBR which keeps work in
Massachusetts. Job security is primarily a function of satisfied
customers. We need to work closely with our employees to assure
Raytheon remains competitive worldwide -- that is the closest we can
get to real job security.
-- The union wanted income and benefits protection during a layoff. We
delivered. Our offer doubled pay continuance for up to 12 weeks for
involuntary layoffs during the contract term. Medical and dental
coverage during this time was extended and guaranteed minimums were
-- The union wanted to continue its vacation, sick and personal days. We
delivered. On the issue of vacation, sick time and personal days, the
company retained the current schedules. This means Local 1505 members
would continue to receive up to seven weeks paid time off, depending on
their length of service. That's up to two weeks more than the maximum
available to most employees at Raytheon.
-- The union wanted improvements in contract language. We delivered.
Throughout the course of the negotiations the company agreed to a
variety of union proposals.
Everyone knows that a strike is not in the interest of the company, the
union, employees, or our customers. We are in a tough and competitive
marketplace so our efforts should be focused on making our operations
successful and satisfying our customers. We should also recognize that
neither the company nor the union gets everything they want out of a single
contract negotiation. We put a fair and competitive offer on the table that
we believed would be the basis for a contract that the company, union and
employees would be proud of.
Command, Control, Communication
and Information Systems
47 Foundry Avenue
Waltham, MA 02453 USA
W. James Nichols
Director, Labor Relations
C3I and Northeast Operations
August 26, 2000
Michael T. Zagami
International Brotherhood of Electrical
Workers, AFL-CIO, Local 1505
2 Rainin Road
Woburn, MA 01801
RE: Final Offer
Dear Mr. Zagami:
As we end eight weeks of negotiations, I'm pleased to present our final
offer. The terms are highly responsive to the issues we discussed during the
bargaining and provide a fair and equitable job package for our employees that
you represent. At the same time, we've arrived at a final offer which
recognizes the competitive realities facing our business. The attached
documents include an offer summary, proposal highlights, and detailed terms
reflecting the many changes negotiated during the past several days.
First of all, a four year duration should provide significant
predictability in the areas of wages, benefits and contract language. This
four-year timeframe is also an opportunity for improved labor-management
The pay package keeps wage rates highly competitive and recognizes the
skill and contribution of the membership. Personalized rates were retained.
Four general wage increases, when compounded, total 14.7% and provide a higher
base for the benefit enhancements we negotiated.
On the health care side, I believe we responded to your deep concerns with
a proposal which fairly addresses escalating health care costs. During the
last five years, we've been the beneficiary of a capped, multiyear contract
with the carrier that placed our rates well below regional and national
averages. However, in spite of the efforts of the company and the union, this
capped, multiyear agreement is no longer available. As a result, the best
rates available to us reflect significant increases. The structure we
discussed should allow us to collectively address this situation. We've
continued contribution categories and a "percent of pay" basis from your
previous plan. In addition, contributions are gradually increased to an end
point that is still lower than what other plan participants currently pay.
The $1,500 bonus essentially covers the increased costs for employees over the
term of the contract.
At the same time we were dealing with health care cost issues, we were
able to offer improvements in medical, vision, and disability. We also agreed
to continue specific provisions in response to your thoughtful argumentation.
Pension formula increases will also occur in each year of the contract.
The vacation, sick time, and personal days for your membership were
retained. Employees keep their current maximum of seven weeks. Payments for
these benefits will be increased as a result of the new wage agreement.
Job security received a lot of attention during our negotiations. We all
recognize that job security is a function of satisfied customers and a demand
for our products and services in the marketplace. As the economy globalizes
and competitive pressures intensify, we need to work together to assure
Raytheon is world class with respect to product technology, cost, quality,
delivery and service. Along these lines, we agreed to continue program
assurances for Patriot, Hawk, AEGIS, and GBR.
Employees will receive broader income and benefits protection, with up to
six additional weeks of Pay Continuance for a total of 12 weeks during the
term of the contract, should they experience an involuntary layoff. We also
offered an extension of medical and dental coverage during layoff and put in a
minimum guaranteed period of 30 days.
Lastly, we spent significant time discussing various contract language and
practice changes which have resulted in numerous modifications.
The remaining task to close out the collective bargaining process is to
achieve ratification of the changes we negotiated. While neither the company
nor the union ever get everything they want out of contract negotiations, I
think we've succeeded in our mission of successfully balancing the various
interests of the parties to produce a contract that the company, union and
employees can be proud of.
W. James Nichols
Director, Labor Relations
C3I and Northeast Operations
Raytheon Company Contract Proposal
International Brotherhood of Electrical Workers Local 1505
-- Contract Duration - 4 Year Term
-- Pay - General wage increases in each year:
-- 3 % GWI (Effective August 26, 2000)
-- 4 % GWI (Effective August 25, 2001)
-- 3 % GWI (Effective August 24, 2002)
-- 4 % GWI (Effective August 23, 2003)
-- Pension - Improved pension calculation minimums in each year:
-- $35 minimum Effective 9/1/00
-- $36 minimum Effective 9/1/01
-- $37 minimum Effective 9/1/02
-- $38 minimum Effective 9/1/03
-- Vacation, Sick, Personal Day Schedules Unchanged ... NO PTO
-- No Bi-weekly Payroll
-- Health Benefits
-- Blue Cross Blue Shield of Massachusetts, as the medical plan
carrier for employees in Massachusetts, New Hampshire, Rhode
Island and Maine
-- Employee contributions maintained on a percent of pay basis
-- Contract Bonus - One-time contract bonus of $1500 to support the
transition to the 2001 medical plan, payable in September of 2000
-- Short-term & Long-term Disability (STD & LTD) Improvements
-- Enhanced disability benefits
-- Premium reduction for LTD
-- Job and Income Security
-- Continuation of Program Assurances
-- Pay continuance maximum doubled to 12 weeks
-- 27 Contract Language Improvements
-- Four General Wage Increases compound total of 14.7%
Beginning August 26, 2000, employees will see an increase in their pay. A
total of four general rate increases 3% (8/26/2000), 4% (8/25/2001), 3%
(8/24/2002) and 4% (8/23/2003). Raises in base pay will also increase the
value of many other benefits as well as employee pensions upon retirement.
The average gain in base pay, compounded, for a full-time employee over
the life of the contract is 14.7%. For example, someone who now earns about
$40,000 a year will earn $45,900 annually at the end of the contract period.
During this period, cumulative additional earnings will be over $14,000. This
amount is increased by the $1500 Contract Bonus.
Because many employee benefit plans are linked to earnings, every increase
in pay also improves the value of the total job package. Benefits linked to
-- Raytheon Hourly Pension Plan
-- Life Insurance
-- Raytheon Savings and Investment Plan, including the Raytheon Stock
-- Disability Income Plans
-- Vacations; Holidays; and Sick and Personal Day Pay
-- Future Social Security benefits.
Over the life of the agreement, the pay improvements will provide an
additional value of $5,400 to the total job package.
Vacation, Sick, Personal Day Schedules Unchanged ... NO PTO
Local 1505 represented employees retain their current vacation, sick and
personal day schedules up to the present maximum (seven weeks).
Payroll Changes ... No Bi-weekly Payroll
Maintain weekly payroll ... no change to bi-weekly. Effective 1/1/01 the
pay week will change to Saturday through Friday. Also, effective immediately,
mid-week pay increases will be retroactive to the beginning of the pay week
and mid-week pay decreases will not be effective until the following pay
Pension Formula Increased
The minimum pension benefit will be increased by $1.00 to $35 for a
pension benefit applicable to active employees effective September 1, 2000.
The minimum pension benefit increases in subsequent years to $36 (9/1/01),
$37 (9/1/02) and $38 (9/1/03).
While health benefit costs were rising significantly in Massachusetts and
throughout the country, we benefited from a five-year "capped" contract with
Blue Cross Blue Shield of Massachusetts (BCBSMA). This multi-year arrangement
expires on December 31, 2000 and is no longer available.
Blue Cross Blue Shield of Massachusetts (BCBSMA) Retained
The Company has recently negotiated a contract with BCBSMA for 2001. The
plan includes some modifications from our current plan. Some modifications
were required to comply with state mandates while others were to cap plan
costs. We looked at several medical plan alternatives and all were more
expensive than the Company's plan. Therefore, we negotiated a one time
Contract Bonus of $1500, for each active employee, to assist in offsetting the
increased cost of health care benefits during the contract period.
Blue Cross Blue Shield of Massachusetts is the same medical plan carrier
as we currently have for employees in Massachusetts and Rhode Island. The New
Hampshire and Maine plan carrier changes from Cigna-Healthsource to BCBSMA.
Medical plan changes are summarized below. However, please note that the
following benefit provisions have been maintained.
-- No change in office visit co-pay ... stays at $15
-- No change to deductibles, out-of-pocket maximums or lifetime benefit
maximums for in-network coverage
-- Diabetic kits continue to be available through both retail and mail
order prescription drug program (lancets and swabs currently in mail
order kit, available over the counter)
-- Coverage for foot orthotics retained
-- Fitness Reward benefit added -- $150 per year per individual/family at
a health club of your choice
-- Out-of-Network 4th quarter carry over deductible benefit added
-- Co-pay eliminated for allergy injections and other physician
-- Routine vision exam benefit added in addition to Davis Vision benefit
-- $15 co-pay for one visit per member/24 months
-- Early intervention-20% coinsurance increased to aggregate maximum of
$3,200 per covered child in each calendar year, not to exceed
$9,600 during time covered child is eligible
-- Routine GYN exams now available out-of-network, with 20% coinsurance
-- Routine adult exams now available out-of-network, with 20% coinsurance
-- 20% coinsurance eliminated for out-of-network ambulance
-- Mental health benefits significantly enhanced for 2001
-- Cosmetic surgery -- restorative benefits now available with no
limitation regarding occurrence in relation to effective date of
Other Plan Changes
-- Out-of-network annual out-of-pocket maximum $2,500 per member plus
deductible, $5,000 per family plus deductible
-- Maximum of three $100 co-pays per in-network admission per member, per
calendar year, in an inpatient, skilled nursing, or rehabilitation
-- $50 co-pay for emergency room visits for accident or medical care (or
accidental injury with initial treatment within 3 calendar days), if
emergency procedures followed (applies in- and out- of-network)
-- $50 co-pay for in-network outpatient surgery
-- $15 co-pay up to 90 days per episode for in-network short-term
rehabilitative physical, speech, occupational or inhalation therapy
-- 20% coinsurance for out-of-network well child care up to age 6
-- $15 co-pay for in-network second surgical opinion
-- Chiropractor visits-must remain in PCP state (in NH, treatment plan
required after 36 visits)
-- In-network retail pharmacy (up to 34-day supply) -- $7 co-pay for
generic; $15 co-pay for brand; and $35 co-pay for non-preferred brand
Mail order (up to 90-day supply) -- $14 co-pay for generic, $30 co-pay
for preferred and non-preferred brand
-- Surgical extraction of 7 or more permanent teeth, and gingivectomies
involving 2 or more quadrants performed in an inpatient setting --
In-network $100 co-pay for facility charges only, if admission
pre-approved for medical necessity. Same for out-of-network, with no
co-pay but 20% coinsurance after deductible
What Does This Mean To You
Combined Medical/Dental Contribution Based on Percent of Pay
Year 1 Year 2 Year 3 Year 4
Employee Only 0.98% 1.13% 1.31% 1.38%
Employee and Family 1.96% 2.26% 2.62% 2.76%
Average amount per week over current contribution model (.75%/1.5%)
Employee Only $1.81 $3.12 $4.73 $5.54
Employee and Family $3.63 $6.24 $9.47 $11.12
*Based on average IBEW annual base pay of $39,832.
Contract Bonus - $1500
In order to offset the initial transition to the 2001 medical plan, a
one-time contract bonus of $1500 for all active employees.
Short-Term and Long-Term Disability
Short-term and Long-term disability benefits have been enhanced as
-- Open enrollment will be offered for 2001 STD Plus Plan, enabling IBEW
1505 employees to enroll for STD Plus coverage for 2001 without
providing proof of good health.
-- The STD Plus 25% benefit will be paid without deduction to net take
home pay amount.
-- The benefit calculation will be based on a five-day workweek.
-- The Intermittent Scheduled Absence Program will provide benefits for
absences for the following scheduled treatments:
chemotherapy/radiation, kidney dialysis, coronary rehabilitation, or
organ transplant preparations.
-- The benefit waiting period will be measured in weekdays
-- Premium change:
-- STD Plus from .20 to .30 per $100 of covered pay
-- LTD Basic from .52 to .40 per $100 of covered pay
-- LTD Plus from .75 to .60 per $100 of covered pay
-- IBEW 1505 employees with PTO will receive the same STD benefits as
Job and Income Security
-- Program Assurances
Current Program Assurances will continue for the duration of the four year
-- Improved Pay Continuance
Employees who are involuntarily laid off will receive improved income and
benefits protection with up to 6 additional weeks of pay continuance, for a
total of 12 weeks during the term of the agreement, on the following schedule:
Length of Service Maximum Duration of
At Least But Less Than Pay Continuance
--- 5 years 4 work weeks
5 years 10 years 6 work weeks
10 years 15 years 8 work weeks
15 years 20 years 10 work weeks
20 years or more 12 work weeks
Medical and dental benefits will continue during the pay continuance
period at the same contribution rate paid by active employees, and for an
additional 90 days during the term of the agreement, at no cost to the
employee. Employees who have exhausted their maximum pay continuance and
benefits during a previous layoff will receive 30 days of continued medical
and dental coverage for each subsequent layoff period.
C-2 Pay Adjustment -- Company will adjust the rate of a recalled employee
to the level of a new hire if that rate is higher.
C-2 COS -- Employees may file COS at time of layoff.
Vacation Year Clarification -- Incorporate the April 25, 1999 Letter of
Intent regarding calculation and adjustment of vacation pay and year.
Recall Administration -- Streamline the recall process and notify Chief
Vacation Year Extension -- Continue current practice as outlined in Letter
of Intent JJM-97-89.
Bulletin Boards -- Union will have space on department bulletin boards
subject to Article 20.
Seniority Lists -- COS Reports -- Company agrees to provide seniority
lists before and after layoffs, and provide regular change of status
Job Postings -- Departmental openings will be posted for three days prior
to filling the vacancy.
Job Openings -- Company will post IBEW job openings outside each plant
Labor Relations office.
20-Mile Clause -- It is the intent to fill vacancies created by
twenty-mile clause recalls unless it would cause a departmental reduction.
Recall Restrictions -- Employees may restrict themselves from the FOC
classification. They also may restrict their recall to a specific level.
25-Year Recognition -- Eligible employees may be paid in lieu of taking
the day off.
Assignment Outside of Massachusetts -- The Union will be notified or have
input in the selection of person being assigned depending on the
Overtime/Andover -- Union given a summary of charges every 6 months.
Parties will meet to discuss related issues.
RF Components/Material Movement -- Add one Material C on the 4th shift and
form a joint committee to discuss related issues.
RF Components/Cafeteria Services -- Company will provide abbreviated
cafeteria services for a 6-month period.
RF Components/Test A Work -- Set up and calibration of burn-in equipment
in Fab 2 will be done by ADC Tester A.
Education Assistance -- Re-affirm the existing agreement.
Scholarship Program -- Joint Scholarship Program will be available to a
greater number of participants.
Safety -- Changes to department Safety Check Sheets emphasizing area
Millwright Job Family -- Create new A, B, C classifications
Electrical Code Re-certification -- Put program into the CCL
Maintenance -- Educational Assistance -- Will be offered for contaminated
Carpenter License -- Required for new hires.
Bargaining Union Employment Opportunities -- Discusses appropriate
placement of bargaining unit employees in the Labs.
Steward Time -- Establishes new ratio of 1 steward per 65 active
employees. Union steward's hours of Company Paid Union Business capped.
Training -- Elimination of certification requirement; establish training
goals and OJT by department.
Separation of Tewksbury and Bedford -- Separate locations for all
Letter of Intent -- The parties have agreed to a joint statement on
Classification/Slotting Issues -- Resolved job slotting issues in the
Machine Shop and the Sheet Metal Groupings.
Contact: David Polk of Raytheon, 781-860-2386 or 800-404-3803.