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Oshkosh Corp.'s Union Ratifies New 5-Year Contract

Mon, 10/17/2011 - 5:45am
Dinesh Ramde, Associated Press

MILWAUKEE (AP) — After rejecting two previous contract deals, the union for production workers at Oshkosh Corp. easily ratified a new five-year contract Saturday after the maker of military vehicles abandoned a provision that would have allowed it to hire temporary workers.

About 77 percent of members approved the deal, said Nick Nitschke, president of the United Auto Workers Local 578. The union represents more than 3,000 workers at the company, which is one of the largest employers in and around Oshkosh, about 80 miles north of Milwaukee.

"I knew it would pass, but I didn't think it would pass by that much," Nitschke told The Associated Press. "People had a different tone today than last week. They were more quiet, not as angry."

The anger stemmed from a provision that would have allowed the company to hire so-called supplemental employees starting in 2013. The temporary employees would have been union members, and the company wouldn't have been able to hire them if regular employees had been laid off and were waiting to be called back to work. But the union argued that allowing temporary workers could undermine its overall strength.

The first two contract proposals both allowed temporary hires, and both were voted down by large majorities.

The company was "very happy" with the outcome, Oshkosh spokesman John Daggett said.

"We think this contract proposal is good for employees, for families, for the company and for the Oshkosh community," he said. "As we've always said, this contract was a fair contract, one that would allow us to compete for future military contracts because we'd have a competitive cost structure."

The company makes military vehicles, including trucks designed to withstand the blast from roadside bombs. The trucks have proven popular with the Pentagon because they're able to handle the terrain in Afghanistan, which is more mountainous and rugged than Iraq.

The five-year labor contract also includes a gradual 8.5 percent wage hike and increased health insurance costs, with premiums for family coverage going up each year from the current $70 per month to $250 per month in 2016.

"I guess that people that voted it in feel they can live with that," Nitschke said.

Another sticking point was mandatory overtime, which the union argued should be voluntary within reason. The company wanted 10 days' worth of mandatory overtime per year, up from the previous contract's five days, but both sides agreed to cap it at eight days.

After Saturday's vote, both sides said the priority was to put any lingering rift behind them.

"We have a good a relationship with the union," said Daggett, the company spokesman. "We're glad we can fully focus our attention now on building top-quality products for our military customers around the world."

Shares of Oshkosh have traded in a 52-week range of $14.07 to $40.11. They rose 82 cents Friday, the day the tentative agreement was reached, to close at $19.06, a gain of 4.5 percent.

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