In an opening salvo of contract talks, Pratt & Whitney management is asking the Machinists union to give up 252 jobs at the East Hartford and Middletown plants, clearing the way for the company to bring in outside contractors for materials handling work on the shop floors.
The number is included in a one-page flier the union gave members Thursday, based on negotiations Tuesday and Wednesday.
The flier also said the union was told by Bennett Croswell, the Pratt military engines chief, that the ramp-up for the F135 engine for the F-35 Joint Strike Fighter will not happen until 2016, rather than 2015 as planned. That engine is already in production in Connecticut and it's unclear what the delay will mean for jobs.
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Pratt said in a memo to its employees that the number of F135 engines it will produce between 2013 and 2020 is 400 fewer than was anticipated in 2009 – a 30 percent decline resulting from tighter Pentagon budgets.
Although the 252-job figure is just a starting point in talks that will intensify as the Dec. 8 contract expiration approaches, the proposal shows the direction Pratt plans to take. As the company moves deeper into the next-generation geared turbofan commercial engines and the F135 military work, its goal is to outsource work to contractors that isn't a core function, and to disperse company work to more sites around the world.
Both of these trends have been happening for years, angering union leaders in Connecticut, the most expensive place where Pratt has regular production.
Pratt's hourly ranks have steadily thinned, mostly through retirements but with some layoffs, to about 2,700, divided equally between Middletown and East Hartford. The number is down from 3,400 three years ago, when the current contract was sealed, and is down from 17,000 30 years ago, before a crushing series of cuts in the 1990-93 recession.
With those numbers in mind, the Machinists union has made job security far and away the primary issue in the talks. The union has already posted a strike picket assignment schedule starting Dec. 9, complete with names and shifts — a common tactic in contract negotiations.
Pratt has also taken measures, preparing salaried employees to operate machines.
The union calls the materials handling plan "despicable" as some members charge the United Technologies Corp. unit with greedily padding profits while it pays executives richly.
The company insists it must cut costs aggressively as it competes fiercely with General Electric and Rolls-Royce for new-generation engine sales, as Pentagon budgets shrink and as the company endures a delay of two to three more years before high-volume production on the F135 kicks in.
A typical union member makes $90,000 a year — a figure that can be reached with a base rate of $36 an hour and eight hours a week of overtime.
But the outsourcing of material handling is not just about saving money. Bringing in a large logistics firm to move parts, assemblies, components and finished engines around the Pratt complexes could be seen as part of the company's continuing effort to focus on its core function of developing and making engines. Companies such as FedEx and UPS have boosted their in-factory services for manufacturers, making a switchover more viable.
Until now, much of the argument between Pratt and the Machinists union has been about moving work to locations outside of Connecticut. A provision known as Letter 22 prevents the company from moving union work on the existing generation of engines, unless the Connecticut plants lack capacity to do that work.
The issue of replacing union workers with outside contractors on the shop floor could be equally explosive — and is also banned under the current contract, for work on the existing generation of engines. The company has made similar moves in years past, notably in the "cribs" where tools and supplies are handled, and among skilled tradespeople such as electricians. The outside contractors, known as "yellow badges" for the IDs they wear, typically earn less than union workers.
But the company has rarely if ever laid off union workers whose jobs were replaced by contractors, instead typically making the new hires after retirements, or after transferring affected workers. Although it's too early to know whether Pratt's current proposal would mean layoffs, many of the materials handlers who would be affected have little or no experience in regular production, a source familiar with operations said.
Bringing non-union replacements into the Connecticut factories and laying off union workers would be highly unusual and highly aggressive, said Jonathan Cutler, a Wesleyan University sociology professor and expert on organized labor. "If they're talking about layoffs now of those guys, they've got a real problem on their hands," Cutler said.
The anger is clear. "It is early in negotiations brothers and sisters but the company is heading down a slippery slope," Thursday's flier said. "This despicable plan of management will cause deep divides on the shop floor and cause increased tension between those who wear yellow badges and our membership."
It may be a slippery slope but it's not a one-way road. As a negotiating tactic, the union could, for example, allow the company to take back the 252 jobs in exchange for protecting jobs in the F135 and geared turbofan programs — jobs that are not covered under Letter 22.
The flier also said weekly health insurance premiums would increase. Health care costs were a significant issue in 2001, when the union went on strike for several weeks. In its memo to employees late Wednesday, Pratt said it is urging workers to use a high-deductible, lower cost plan rather than the more costly, full-coverage ConnectiCare plan.
Pratt and leadership of the International Association of Machinists and Aerospace Workers have agreed not to talk publicly about the negotiations.
Pratt's outsourcing request could also add pressure to the state's two U.S. senators and U.S. Rep. John B. Larson, who often tells the story of growing up in East Hartford, one of eight children of a Pratt firefighter. Larson said he's committed to keeping as many union members on the job as possible in Connecticut — and is scheduled to meet with union leaders Friday but declined to say whether he would push the company to save more union jobs.
"I am hopeful that, in the negotiations, both sides come together on the best solution," Larson said in a written statement. "I will be speaking with both sides in an effort to facilitate constructive discussions."
Read The Haar Report at http://www.courant.com/haar.