Members of International Brotherhood of Teamsters Local 1145 have ratified a new four-year labor agreement with Honeywell International Inc. in Minneapolis that increases wages 7.5 percent over term and covers 1,050 employees, the union and the company told BNA Feb. 13.

“This was a tough round of negotiations,” IBT Local 1145 Secretary-Treasurer Joseph Witzmann said in a Feb. 5 statement. “The company proposed cutting 135 jobs, which we were able to save in negotiations. The new agreement represents improvements in wages [and] pensions.”

The vote took place Feb. 2. The new contract, which covers all 1,050 production and maintenance employees at Honeywell's four Minneapolis plants, took effect Feb. 1 and will expire Jan. 31, 2017, the union said.

“We're pleased that we reached an agreement that has been ratified by members of the International Brotherhood of Teamsters Local 1145,” Bruce Eric Anderson, a Honeywell spokesman, told BNA Feb. 13. “Both sides worked collaboratively through the negotiations and the resulting agreement is fair to employees and the company.”

No Wage Increase in First Year

The contract, which was ratified by 61 percent of the bargaining unit, does not provide for a wage increase in the first year, Witzmann told BNA Feb. 13. Workers will receive a 2.5 percent raise in February 2014, a 2.5 percent increase in 2015, and a 2.5 percent raise in 2016.

The average hourly rate for bargaining unit employees is $25, Witzmann said.

Employees will contribute 20 percent toward the cost of their health insurance premiums, while the company will pay the remaining 80 percent, the union said, the same proportion as under the last contract.

However, employee contributions toward health care insurance premiums will increase in 2013. Employees with single coverage will pay $152 per month, up from $103 per month. Workers with family coverage will pay $310 per month, up from $210 per month.

Employees' deductibles also will increase under the new contract. Beginning in 2013, employees with single coverage will pay an annual $250 deductible, up from $200. Meanwhile workers with family coverage in 2013 will pay an annual $625 deductible, up from $500. The annual out-of-pocket maximum for deductible rates will be $3,000 for individual coverage and $6,000 for family coverage in 2013, also increases from the last contract.

However, in 2014, the health care plan will change to a “consumer driven high deductible plan,” Witzmann said. The structure of the plan will change from single and family coverage to single coverage, employee-plus-spouse coverage, employee-plus-children coverage, and family coverage.

Witzmann said the deductible rates, out-of-pocket expenses, and premiums are subject to change throughout the life of the contract. In 2014, employees with single coverage will pay a $1,500 deductible while those with family coverage will pay a $3,000 deductible. The annual out-of-pocket maximum will be $4,000 for individual coverage and $8,000 for family coverage in 2014.

Witzmann could not provide figures for the premiums in 2014 through 2016 or the deductible rates in 2015 and 2016.

Pension Benefits Improve

Pension benefits will be improved, Witzmann said, with a $5.50 increase, over the contract term, in the monthly pension benefit for each year of service. The benefit will increase from the current $63 to $65.50 effective Feb. 1, 2013; $66.50 in 2014; $67.50 in 2015; and $68.50 in 2016.

As of Feb. 1, 2013, employees and future hires will be offered a 401(k) plan as opposed to the defined benefit pension that current employees have. Honeywell will offer employees a 1 percent match provided that employees contribute at least 2 percent of their salaries.

The company also is no longer offering retirement health care benefits. Honeywell offered retiree benefits under the last contract and paid a premium that matched the premiums active members paid.

Witzmann said the company wanted to make all health care benefits in the new contract covering the Minneapolis plants consistent with other Honeywell locations.

“It was either a vote to strike or a vote for this,” Witzmann said. “And [members] voted to not go on a potential work stoppage.”

Witzmann said the union proposed that the company join the Taft-Hartley multiemployer health care plan, which could have saved Honeywell millions of dollars each year, but the company declined it.

“The company wants total control of employees” even if it means losing potential cost savings, Witzmann said.