Asarco collective bargaining agreement approved

By Caroline Salls

Pittsburgh, March 15 - Asarco LLC obtained court approval of its agreement on a new contract with The United Steelworkers and a coalition of other unions, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the new contract covers 1,600 hourly workers, and the unions representing workers at Asarco included the United Steelworkers, International Brotherhood of Electrical Workers, Machinists, Boilermakers, Teamsters, Operating Engineers, Millwrights and Pipefitters.

The agreement includes:

• A single agreement covering five locations and the coalition of unions, expiring on June 30, 2010;

• Strong successorship protections in the event of a sale of the company and substantial union influence over any plan of reorganization restrictions on the company's ability to outsource work;

• A requirement that the company will remain neutral in future union organizing campaigns and will grant recognition on the basis of a card-check;

• The inclusion of at least one, and most likely two, union-nominated members on the company's board of directors upon its emergence from bankruptcy;

• Commitments that the company will invest in the business and that no money can be taken out of the company unless strict standards are met;

• A $3,000 ratification bonus;

• A $1.00 per hour wage increase, retroactive to Jan. 1;

• $1.00 per hour wage increases, effective Sept. 30, 2008 and Sept. 30, 2009;

• Quarterly bonuses tied to the price of copper;

• A 20% increase in the pension formula;

• No increase in active health care or drug contributions;

• A new SUB Plan and insurance continuation for employees who are laid off; and

• Restoration of most of the health care benefits for previous retirees whose benefits were cut by Asarco in August 2003, and a sizable reduction in monthly contributions.

In addition, the agreement includes a stipulation reached Monday that resolves issues related to parent company Grupo Mexico SA de CV's equity holdings under the agreement.

The stipulation includes a special successorship clause, under which following a sale or change of control of the company, the buyer will be required to recognize the unions and enter into a collective bargaining agreement with them.

The clause runs through the effective date of Asarco's plan of reorganization.

Also under the stipulation, before the effective date of a plan of reorganization and provided that the parent does not exercise control over the company, the parent is not a party to the collective bargaining agreement and is not bound by its terms, regardless of its status as a direct or indirect owner of Asarco's equity.

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9, 2005 in the U.S. Bankruptcy Court for the Southern District of Texas. Its Chapter 11 case number is 05-21207.

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