Kennecott Copper Corp.'s union workers ratified a six-year contract with the copper-producing giant by a margin of 57 to 43 percent Thursday night despite misgivings by labor leaders that employees at the lower end of the seniority scale might suffer.
Company officials, meanwhile, were happy with the outcome."Obviously, we're pleased with the vote last night," said Alexis Fernandez, Kennecott's director of public affairs. "We've talked back and forth on this for the last few months and it's been long and difficult for both sides.
"Now we've got a contract through the year 2002. It's good for Kennecott Utah Copper and that means it's good for Kennecott employees," she said.
The pact takes effect immediately.
It provides a better average raise and average pension benefits than the company had offered earlier, but the duration of the contract is troublesome to some work-ers.
Union officials said workers took the time to make a thoughtful and well researched decision, but perhaps were influenced to some degree by Kennecott's recent declaration that it would hire replacement workers if current employees went on strike. When the talks broke down recently, the workers did strike for two days last week but returned to the job while negotiations resumed.
"I don't think anybody's jumping for joy," said Brian Hoskins, president of Local 4413 United Steel Workers of America. "There is a lot of apprehension about such a long contract - six years is a long time.
"We informed our members very well and they took a long time to decide. After two days, they voted their consciences," he said.
Hoskins said he couldn't deny that Kennecott's stated intention to hire replacement workers may have had some effect on the vote. "That's a concern of every labor leader," he said.
Hoskins said he is particularly concerned about what will happen to employees who have little seniority who will get less financially than veteran Kennecott workers. "It's tough to sign on for six years because you don't know what the climate in the community will be in six years."
For example, the Salt Lake Valley's explosive growth has boosted home prices to such a degree that this area is the hottest real estate market in the nation. Hoskins wonders how well some Kennecott employees will fare if prices for homes and other things rise dramatically over the next six years and the labor contract locks them into certain salary levels.
"I don't want them to become the working poor. If the workers of a corporation such as Kennecott qualify for food stamps, that would be a travesty," Hoskins said.
He said one good thing about the new agreement is a gain-sharing provision that would provide extra cash to employees if Kennecott met certain production and profit goals. "When the smelter comes up to top production, we will establish a gain sharing program for the people," he said.
Fernandez also said both sides favored that idea.
"What we've agreed to do is to form a joint study committee with the unions to study that kind of possibility to establish a gain sharing program. Basically, you set a goal and if you come in so much under your budget, you take that amount and divvy it up between the company and the employees," Fer-nandez said.
The contract calls for a $2.95 per hour average pay raise over six years - which is higher than the $2.80 raise that had been discussed during earlier negotiations.
The agreement also includes a 33 percent increase in average pension benefits, which also is 3 percent higher than what had been discussed earlier.
The new contract would mean that an employee who retired at age 60 after working for Kennecott for 30 years would get $1,472 per month rather than the $1,102 per month provided for under the old contract.
Other provisions in the new agreement include: no out-of-pocket costs for HMO premiums for 1997 and 1998, new vacation pay advances, a $30 increase in weekly accident and sickness benefits, an improved company/union apprenticeship program and better overtime procedures including a mandatory eight-hour rest period required after 16 hours of work.
Employees will pay more for health insurance. The contract calls for a $200 deductible for an individual and $400 family deductible for 1996-1999. Those deductibles would rise to $350 for individuals and $700 for families for the years 2000 and 2001.