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Groton — Electric Boat and the Metal Trades Council have agreed to a new five-year contract that includes raises, a pension increase for current employees and a voluntary severance package.
The union’s 2,200 members were asked to vote on the deal Tuesday. Those voting approved it 1,307 to 277. About 40 votes from employees who are working off-site have not yet been counted.
Considering the economic climate, Kenneth DelaCruz, MTC president, said, it is “a good contract.” The MTC includes boilermakers, office and professional employees, pipefitters, machinists, teamsters, laborers, electricians and painters.
“I think the company acknowledges the skill sets of the workforce and recognizes that you have to maintain these skill sets,” DelaCruz said Wednesday.
In a memo to employees, Electric Boat President Jeff Geiger described the agreement as fair for the company and MTC members.
“We believe this contract benefits both Electric Boat and the bargaining-unit members,” he said. “With the stability this contract provides, we can continue producing the submarines the U.S. Navy needs to maintain undersea dominance.”
Electric Boat in Groton and Newport News Shipbuilding in Virginia build two Virginia-class submarines annually under a teaming agreement, and EB is designing the ballistic-missile submarine to replace the Ohio-class boats.
“In addition to strengthening compensation and benefits for the workforce, these successful negotiations also avoided any disruption to the incomparable assembly of the most advanced submarines in the world,” U.S. Rep. Joe Courtney, D-2nd District, said in a statement. “Approval of this agreement provides important momentum to EB and its highly skilled workforce as they continue to achieve incredible success in the two submarine a year build rate and prepare to tackle the Ohio Replacement Program.”
The 65-month contract, which covers this month through Sept. 27, 2019, provides a 3 percent wage increase in 2014 and 2015 and a 3.5 percent increase in 2016, 2017 and 2018. The hourly rate for a first-class mechanic, for example, will increase from $26.48 to $31.14, for an additional $9,692.80 over the contract term.
Beginning in 2015, the multiplier that is used to calculate the monthly pension for eligible union members will grow from $54 to $59 for future years of service. New hires and those who are rehired after Dec. 31, 2014, are not eligible for the benefit, unless they previously participated in the company’s retirement plan.
DelaCruz said the union lobbied for pensions for new employees but the company did not want that liability.
Under the voluntary severance plan, union members who are at least 62 years old and up to 65 with five years of continuous service can accept a payment of $25,000, or medical care at the rates paid by active employees until they reach 65, as incentive to leave the company. Employees who are 65 years and older with five years of continuous service would receive the $25,000 payment.
“It would save some of our younger folks from layoffs this year,” DelaCruz said. “We could have some downturns. We saw this as helping out the young folks, as well as helping out the folks who put a lot of years into this place.”
Moving forward, DelaCruz said, “We should be in pretty good shape.”
During six weeks of talks, DelaCruz said the negotiators discussed medical insurance at length and agreed to continue with the existing plans, with modest premium increases and plan design changes. To encourage people to use the company pharmacy, the co-pay for employees who are taking medication for chronic conditions will double if they do not use the EB pharmacy.
EB will also annually contribute 2.6 percent of each union member’s base wages to the 401(k) plan on behalf of the employees.