Wise decision for workers to avoid strike at Lockheed?

Unemployment is at double digits in metro Atlanta and Georgia.

Unionized public workers are taking it on the chin in many states.

So was it wise for Lockheed Martin workers in Marietta to reject a strike recommended by their union leadership?

The leadership was trying to stop Lockheed from reducing the retirement plan for new workers, AJC reporter Marcus Garner writes. Instead of the more lucrative existing pension plan, new employees will get a 401(k) plan.

As best they can, unions are supposed to fight two-tier systems that treat new and existing workers differently.

What’s more, the change, which the company said it needs to remain competitive, is not small potatoes, Garner reports.

Union members said a current 30-year employee could draw nearly $730,000 in pension money over 23 years after retiring at age 55, Garner writes.

That compares with the $42,000 payout a new employee would have for retirement after the same time at the company and at the same age, Garner reports. With the 401(k) plan, Lockheed will contribute $1,400 a year for each new worker, in addition to employee contributions.

The difference wasn’t enough, however, to convince a two-thirds majority to vote to strike, Garner writes.

What do you think? Smart move or short-sighted?

Will workers at other companies face similar choices in the future?

- Henry Unger, The Biz Beat

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48 comments Add your comment

Dave56

March 7th, 2011
7:16 am

Having been involved with Lockheed/Marietta over 20 years, your first two sentences state the case quite well. Large govt. contractors are the last to get real concerning all benefits, including retirement. As stated by the new CEO over there, the bottom line is the bottom line. To stay competitive, Lockheed (indeed, all govt. contractors) have to follow the lead of GM, Chrysler, et al, and not only cut retirement benefits, but look at all cost effective measures to stay viable. Unfortunately, the inequitable treatment of tenured employees versus new hires is regrettable, and will of course cause new tensions in a workplace already stressed.

DoTheMath

March 7th, 2011
7:47 am

It seems interesting that the union comments and the article only count the company’s contribution to the new 401(k) plan when making a comparison to the current plan and do not even factor in any knid of interest over that 30 year period. Makes you wonder if the union and/or the AJC are trying to present a biased view.

Laurie

March 7th, 2011
7:58 am

I’m glad the employees decided not to strike. A strike right now would have only added fuel to the fire in the rupublican backed fight against organized labor. The package offered is a decent one considering the current economic landscape. Government contractors like Lockheed rely on taxpayor money to be profitable, so luxuries like pension plans need to go. Now, if we find out that Lockheed execs recieve millions in bonuses over the next three years, I think the union will have every reason to fight for that piece of the pie when the next contract is up. But the pie should be in the form of percentage based bonus’ or one-time payouts. Life-long obligations are just not sustainable.

lnthomp

March 7th, 2011
8:08 am

Maybe union members are starting to see that they have a choice of allowing their employers to make a profit, or not having an employer.

Shawn

March 7th, 2011
8:11 am

The line “The deal also… increases pension payments from the company by $11 a month” is vague at best, misleading at worst. That $11 is per month per year of service, going from $77 to $88, a 14% increase. Thus, if an employee had 20 years of service, the monthly payout would go from $1540 to $1760, a $220/month increase. For 30 years, that’d be a $330/month increase.

Hunner

March 7th, 2011
8:12 am

If they would have went on strike people would have been asking what to do with that big empty lot up there in Marietta in a few years…

I cannot believe the union president was “disappointed.” Shouldn’t she listen to what the workers want?

Unions are the serpent squeezing the life out of the US

Charles

March 7th, 2011
8:29 am

Good- It would have been a bad image on those workers. They obviously don’t know that the UR in GA is 10.4%!

DJ

March 7th, 2011
8:32 am

I’m glad the union members decided to go against the call to strike. They should be thankful to have a job, given the state of the economy. Unions have far outlasted their usefulness, and should be disbanded. It amounts to guaranteed income/benefits for the worker, and higher prices for the rest of us. Just look at the auto industry for an example.

deegee

March 7th, 2011
8:36 am

Who, other than the military retire at age 55? It’s a fair deal, the union members should be happy with it.

larry

March 7th, 2011
8:39 am

Now, if we find out that Lockheed execs recieve millions in bonuses over the next three years, I think the union will have every reason to fight for that piece of the pie when the next contract is up.

And that is exactly what will happen!!. I was hoping Lockheed would not go down this road. What does everyone think that has been going on since the early ’80’s? These companies has been offloading their pension contracts and obligations on to the federal government ( The Federal Guaranty Corp.) and giving the money that would have gone to the pensions to CEO’s who havent lifted a finger to help. Why do you think average wages in this country have gone DOWN 4% since 1980? , while CEO pay has gone up over 230%.

Reverie

March 7th, 2011
8:40 am

This proves that the union rank and file is smarter than their leadership. Yes this decreases what a new hire receives. Big deal. That is exactly what has happened in most businesses over the last several years. Not just GM and Chrysler but also to employees of smaller companies like Genuine Parts, 3M and Coca Cola. The days of cushy, employee contributed retirements have ended. We HAVE to go back to more personal responsibility and a lot less “waiting for the guvment” to attend to our needs. Lockheed employees are no different and should be held to the same standard.

Reverie

March 7th, 2011
8:42 am

By the way, Larry. Lockheed has not off-loaded their retirement obligations to the federal government. That has primarily been done by failed companies. It isn’t as simple as “I don’t feel like paying for this any more”.

Buzz G

March 7th, 2011
8:59 am

The deal is more than generous. I find it amazing that there is even any discussion of it.

joe

March 7th, 2011
9:05 am

The unions in Wisc, Ind, Ohio, etc should take a hard look at this decision. At least some union members see that the time, they are a-changing. With our economy, we simply cannot afford to pay for union pensions and benefits, and they days of bus drivers making six figures with 12 weeks off are over.

This morning on Bortz, he played a clip of a Wisc union member asking a Gov Walker supporter, “why do you have a right to your money?” Shows just how out of touch most of these unions are.

Paul

March 7th, 2011
9:14 am

The defined-benefit pension is fast becoming a thing of the past, even in government jobs. Very few organizations can confidently make pension promises 40-50 years out. The idea of a new employee today retiring at 55 and spending the next 30 years collecting a company pension is just not realistic, union or not. I have a pension payment due to me from a previous employer. So far the management of that money has changed hands three times, so the chances of me getting a check from the legacy of that company starting in 2031 are pretty slim.

fitzgerald

March 7th, 2011
9:16 am

In this case, the union workers at Lockheed made the correct decision not to strike. Union leaders seldom listen to their members. If the national defense budget is cut a good bit, then Lockheed may have a large empty parking lot……………strike or no strike. Personally, I am against unions. However, if I had been union bred perhaps my opinions would be entirely different.

CDC

March 7th, 2011
9:21 am

Absolutely, they did the right thing. Trying to hold on to an old-style retirement plan is nothing more than sticking your head in the sand. While I have the opportunity I want to mention that your article last week on Delta Air Lines on-time performance was just more of the same the fish-wrapper coverage I have come to expect from this newspaper/fish-wrapper. On the heels of your latest round of Delta bashing came this: Delta was ranked the most admired airline worldwide in Fortune magazine’s 2011 World’s Most Admired Companies airline industry.

James

March 7th, 2011
9:48 am

“All that serves labor serves the nation. All that harms is treason…If a man tell you he loves America, yet hates labor, he is a liar…There is no America without labor and to fleece on is to rob the other.” Abraham Lincoln

Too much power for their own good

March 7th, 2011
10:03 am

My Dad was a laborer at Lockheed and was promoted to a position that gave him direct super vision over mostly union workers. He was well respected by his teams, but he found it virtually impossible to discipline or fire people for not working, for showing up drunk, for hiding out and sleeping on the job — repeatedly. The union would have them back on the job within 48 hours and the bums knew he couldn’t do anything about it. Now we have OSHA and a host of other gov agencies to help ensure a safe workplace and a fair wage. Unions have an unfair stranglehold on many important businesses. Their goal’s are generally far more lopsided in their own interests than anyone could logically accuse of management – yet management is not allowed to take any action to level the playing field, and unions just want more and more and more.

Too much power for their own good

March 7th, 2011
10:11 am

@ James — really, who is fleecing who. Why should tax payers be burdened with bailing out companies like Lockheed when they can’t fund these fat pensions that are far and above the average worker? (its already happened brother — I lived through it in the 60’s and 70’s with Lockheed) The average tax payer get’s nothing like this and they’ve got to pay for someone else’s? Abraham Lincoln was right — there is no America without labor. But guess what, now there is virtually no labor because of unions (they make it somewhere else).

TnGelding

March 7th, 2011
10:13 am

“The difference wasn’t enough, however, to convince a two-thirds majority to vote to strike, Garner writes.” Duh, do you think it might have been because it doesn’t apply to them? I don’t like the two tiered pay schemes. Bad for morale.

I was surprised the vote wasn’t closer. It was short-sighted and selfish but necessary under today’s conditions. It would have been great if they could have made a valiant stand, but nobody wins in a strike, but I suspect the company would have come up with a little better offer. But not enough to fight over.

If the Tea Party gets its way, they’ll all be out of a job anyway.

TnGelding

March 7th, 2011
10:20 am

I could be drawing a small pension from the bomber plant. Unless things have changed since I worked there the USAF is the one being fleeced.

Obvious

March 7th, 2011
10:22 am

Proving themselves uneducated, entitled dupes that look an awful lot like welfare queens. As long as they get theirs!! Lockheed was wise to settle in a state full of sheep.

EC Sedgwick

March 7th, 2011
10:32 am

What astounds me the most is that the posters do not aspire to reach the pay levels of Lockheed employee’s. They wish to bring the wages down to their level.No wonder the middle class is gone.

Ima Greedmonger

March 7th, 2011
10:47 am

Perhaps these overpaid,greedy,self-serving Union slugs have finally wised up and seen the handwriting on the wall. They are now going to accept reasonable salaries and benefits just like the rest of us honest stiffs in the working world or be out on the streets! Just like in Wisconson the general public is fed up with Union thuggery!!! That is esp true of the criminal Union chief thugs!!

kgfj

March 7th, 2011
11:27 am

Larry @ 8:39 – Moe and Curley are looking for you.

rl

March 7th, 2011
11:31 am

I think the workers should have had a strike demanding their rights and more pay! Then I think Lockheed should have gone to Mexico.

Bright Idea

March 7th, 2011
11:31 am

“…retiring at age 55″??? What the heck? Who retires at 55?

Common Sense

March 7th, 2011
11:39 am

Pretty simple. We have a job offer for you new employee. We have a 401k to offer. Do you want the job? He can say yes, or he can say no.

Boss Hawg

March 7th, 2011
11:44 am

Union bosses showed their true colors when they simultaniously proclaimed to stand for workers while trashing them for voting for a fair agreement.

Mike Jones

March 7th, 2011
12:01 pm

Somone showed some good sense for once at Lockheed.

downsouth

March 7th, 2011
12:12 pm

for those concerned about two-tiered systems. where do you start to make changes? the new workers can accept or decline the position if offered. at least they have a 401k plan. how many employers stopped offering those in the last couple of years? plenty.

another thing in some of these types of employment situations, you’ve got long time employess who don’t work very much, or then there are those who “retire”, yet come on as a well paid part timer, keeping another new position unfilled, and prevents another employee from moving up the list for promotions or whatever. happens way too oftern in the city / county / state governments too.

Jack

March 7th, 2011
12:21 pm

Sorry Denise, we can read and do simple math. We know that the last two strikes were complete failures when we came back with exactly the same offers after losing 8 weeks pay. You should be thanking us for showing some common sense. A strike on this contract at this time would have been the end of the Union at Lockheed as we know it. We did you a favor!

I hope you’re ready to come back to work in the plant or retire because your days as President are numbered. I see at least 1300 votes against you.

eastbound and down

March 7th, 2011
12:22 pm

those overpaid,greedy,self-serving CEOs have finally won the battle. maybe lockheed can hold on the line on cost over runs on the JSF. lol.

oh no

March 7th, 2011
12:38 pm

the union at Lockheed does nothing but protect the sorry-assed workers that get fired and run to the union for protection. if they worked anywhere else they would be hunting a new job

mike

March 7th, 2011
12:53 pm

To answer the question of who retires at 55, mainly the CEO’s who are paid millions of dollars in salary and bonuses. It is interesting most of the people who have negative comments about the union are not union members. I hope this does not come back to bite those folks since management will now always have the power to dictate to employees how they will be working and what pay if any they will receive. First the teachers and now the manufacturers. This is going back in time.

TnGelding

March 7th, 2011
1:02 pm

Realistically, how many new hires will ever work long enough at the company to retire? Most of us on this blog over 65 probably passed through there.

A lot of us are retiring at 55. That’s the dirty little secret of Social Security and pension income averaging. We’d be better off financially without SS if we worked on to 65. But that’s a big if. After 35 years of hard labor we can barely make it to 55. That’s why I say to raise the age again to draw full benefits is a non-starter.

Rick

March 7th, 2011
1:06 pm

In bashing unions it is easy to forget how oppressive American working conditions were before labor unions began to appear. If you enjoy a forty-hour week, perhaps a couple of coffee breaks during the day, time-and-a-half for overtime, a vacation every year, paid holidays, you can thank those union members of old who bargained for and struck for those benefits. Do you honestly think management would have done anything on behalf of the worker had it not been compelled to do so? You may not be in a union, and you may not work in a union shop, but the benefits you have were earned by union workers and you should make no mistake about that.

Jborodawg

March 7th, 2011
2:23 pm

Common Sense, downsouth and Paul…”The defined-benefit pension is fast becoming a thing of the past…”
True. Thus the latest contract is a good deal; raises and bonuses; not bad. New-hires will/or should know this coming in. If there’s “friction”, it’ll be because the union, not necessarily the new hires.

Too much power…”virtually impossible to discipline or fire people for not working, for showing up drunk, for hiding out and sleeping on the job — repeatedly. The union would have them back on the job within 48 hours…” Also true. I’ve seen this myself with most unions. It’s not just private sector either. Most of us would be astounded and perplexed with what postal (union) workers get paid and the fact that it’s near-impossible to fire one.

Rick … Coal miners need unions; very few others do this day and age. I hate excessive CEO pay as much as the next guy. But, that has nothing to do with being unionized. It has everything to do with being a shareholder and voicing your opinion with the boards of directors, etc; or, declining to give your business/hard-earned money to a business with which you disagree.

jay

March 7th, 2011
6:08 pm

Funny, unions are supposed to be about solidarity, but it looks like the older employees who had pensions sold out the younger ones!

jay

March 7th, 2011
6:11 pm

This is why unions in the south are jokes. What do you think the teamsters would have done? At least the teachers in Wisconsin are standing together. Paying dues and your fellow union member sells you out!

SmyrnaSam

March 7th, 2011
6:53 pm

The union at Lockheed Martin did the right thing in voting not to strike. I’ve lived through several strikes and what people don’t realize is that after the union benefits run out for the people walking the picket line, their rank and file suffer immeasurably. They have their electricity, telephones and gas cut off. Their kids show up at school wearing old clothes and worn out shoes. Eventually they lose their homes. Even when an agreement is reached and the rank and file return to their jobs they really never make back the money they lost during the strike. You can review all of the empirical data of strikes and their aftermath. You’ll find that NO ONE wins in a strike. This fact needs to be drilled into the minds of everyone whom is either a member of a collective bargaining unit or in management of a company that employs unionized workers. All we have to do is to look back a bit during the Eastern Airlines strike when thousands upon thousands of jobs were lost when Eastern finally went out of business. The southern part of Atlanta hasn’t really recovered to this day to the level it was before the Eastern strike.

Rob

March 7th, 2011
7:19 pm

I don’t understand why the Union didn’t support this for “new hires”. A new hire has a choice to go work somewhere else if they don’t like the job/compensation/benefits package that the company is offering.

jay

March 7th, 2011
7:19 pm

Eastern was a private funded company. Lockheed is a government welfare cash cow. $600 toilets and cost plus contracts are gravy. If union members making $60,000 – $65,000 per year can’t hold out for a week or two, then they are a pretend union.

jay

March 7th, 2011
7:21 pm

SrmynaSam,

It is because union members paid the price in the past you have those benefits. Modern union members in the south are soft and gutless.

winkasdad29

March 8th, 2011
9:15 am

The rank and file did not approve the strike vote. They took the deal offered because it’s a good one. These days, new hires don’t get as good a deal as us old heads.

I’ve been in my union for almost 30 years. Many who are not in unions have no clue what it means to be a member, and of the benefits. Remember this: management and the union sign a contract. Once the contract is signed, then management and union has to live up to it. It’s a two-way street.

Sure there are unions that are corrupt, but the majority of us union workers realize if the company doesn’t make money, then we don’t make money. Conversely, if work conditions are unsafe, and workers are not treated according to the terms of the contract, then it’s trouble for both parties (lawsuits, etc.)

jay

March 8th, 2011
9:45 am

“These days, new hires don’t get as good a deal as us old heads.”

Like I said, the older union softies who should be strong sold out their union brethern. Southern unions are fake …….as long as I get mine, I don’t care about you.

What, does “IAM” stand for “I am the only one to be concerned about?”

strike on

March 8th, 2011
11:33 pm

The workers should have gone on strike to get a lot more money and better benefits they deserve. Lockheed is underpaying their workers big time and a strike would have made management pay a lot more. Hopefully, the union can get a strike together next year.