Progress stalls on Case, United Auto Workers negotiations. Here's why.

Nearly six months have passed since Case New Holland Industrial's 1,100 unionized employees in Iowa and Wisconsin went on strike after failing to reach an agreement to replace a six-year contract that expired April 29. The two parties remain at an impasse.

CNHI, an agriculture and construction machinery maker, has put forward several proposals throughout the course of negotiations, but none have been put to a union membership vote.

The UAW last week requested the help of third-party mediation via U.S. Secretary of Labor Marty Walsh, pending Case's willingness to proceed.

Rebecca Fabian, a spokesperson for Case, did not respond Friday to questions from The Hawk Eye, including whether the company would be open to third-party mediation.

The request comes weeks after Case's most recent offer, put forward Sept. 29 and described by the company as its "last, best and final."

That offer came close to membership vote, United Auto Workers Local 807 President Nick Guernsey told The Hawk Eye, but it was derailed by a combination of rhetoric used by the company in its modified offer and limited venue availability.

"The Company gave the Union its LAST, BEST AND FINAL OFFER at 1:00 p.m. on Thursday, September 29, 2022," the modified offer Case provided to UAW representatives in Madison, Wisconsin, later that same afternoon states. "Thereafter, the Union asked (BEGGED) the Company to make a few modifications to its LAST, BEST AND FINAL OFFER."

Per the modified offer, Case had agreed to increase the first-year wage hike for non-skilled trade employees from 8.5% to 9%, while reducing the 2025 wage increase from 4% to 3.5%; increase the amount of contingent ratification bonus from two payments totaling $4,500 to one payment of $5,000 60 days after return to work (the UAW has been pushing for $8,500 ratification pay based on the amount given to John Deere employees); and cap employee premium contributions for 2024 to no more than 5% for preferred provider organization plans.

But those modifications would remain only if the union ratified the contract by 5 p.m. Oct. 14.

Guernsey said the UAW representatives began looking for venues to hold the vote in Burlington and Racine, but the earliest availability was for Oct. 15. It wasn't until after both parties had left the negotiating table that Guernsey took note of the wording.

"We didn't even catch that they threw in the word 'begged,' because they handed it to us and said they made the changes that we wanted," Guernsey said. "Well, we got on the road and went home. We didn't catch it until later in the weekend. ... It's created kind of a tornado effect."

Guernsey said the verbiage, along with the deadline set by CNHI, called into question the company's good-faith bargaining efforts and has resulted in a stalemate that comes on the heels of weeks of progress.

"We had made considerable movement that the company just misread. So instead of negotiating, they picked the ball up and left," Guernsey said. "We did more movement in the last three weeks than we have in the entire (almost eight) months we've been negotiation."

What Case New Holland is and isn't offering union workers

CNHI reached out to its union members last week via letters and a full-page ad in The Hawk Eye advertising its final offer and highlighting the modifications that were lost when the contract wasn't ratified Oct. 14.

"We know the last seven months have been difficult for you and your families," the letter and ad state. "Over the course of the negotiations, we have attempted to reach a fair and equitable agreement that would allow us to remain competitive while addressing your needs and the demands of your union representatives.

"Unfortunately, after seven months of negotiations, we remain far apart on many important issues. Because of this lack of real progress, we presented the union with our last, best and final offer ("LBFO"). Your union requested that we make a few modifications. Both the original LBFO and the modified LBFO contained substantial improvements from our earlier proposals."

The letter and ad go on to list the following:

$5,000 ratification bonus

Wage increases totaling 23% over the course of the four-year agreement

Up to 25% increases for some skilled trades workers

Required use of only one week of vacation during the summer vacation shutdown (under the previous contract, workers had to use paid time off throughout the duration of the shutdown)

Veterans Day as a paid holiday

A one-time $1,000 WCM elimination payment for eligible employees

Equalized and increased shift premiums for second shift to 80 cents per hour and for third shift to $1 per hour by the end of the agreement

Increased sickness and accident payments ranging between 55% and 62%

$125 annual safety shoe allowance

$150 annual skilled trades tool allowance

Extended current PPO health care plan option for the duration of the contract with the employee premium contribution frozen for 2023 and a 5% cap on premium increases in 2024

Three additional health plan options with a company contribution of $500 for single coverage or $1,000 for any other coverage tier for any employee electing a health savings account plan for coverage in 2024

$1,000 incentive payment for any employee remaining in the HSA or electing an HSA plan or the HRA plan for coverage in 2026

Maintain the current 401k plan with the automatic 5% company contribution.

The letter and ad go on to highlight what was lost as a result of the missed deadline, including a $1,000 reduction in ratification bonus, a half-percent decrease in first-year wage and the 5% premium cap, and a "null and void" plant closing moratorium.

"We encourage you to request a copy of our original LBFO from your union representatives so that you can decide for yourself if it's a good fit for you," the company said. "We hope to end the strike and be back working together again soon."

A copy of Case's proposal is available for members to view at the union hall and it was reviewed in full during the UAW Local 807's general meeting this month. Guernsey said he is looking for a venue to have another meeting to review the contract for members who were unable to attend or have questions.

'The ugly fruit off the tree': Union representatives say offer lacking in wage, health insurance and vacation offerings

While Guernsey had been prepared to put the offer to membership vote, he and Richard Glowacki, president of the Case Council and chairman of Racine's UAW Local 180, said it's lacking in some areas to the point where some members may have voted against it.

"Every mailing and every PR campaign that they have done since the beginning of negotiations, they have only picked the highlights," Glowacki told The Hawk Eye. "They have not picked any of what I would call the ugly fruit off the tree."

Glowacki and Guernsey pointed to differences in pay between unionized and non-unionized plants. The Case plant in St. Nazianz, Wisconsin, for example, is offering $4,000 sign-on bonuses and $22.37 per hour for assemblers. Under the most recent UAW contract that expired at the end of April, assemblers in Burlington started at $20.89 per hour.

Glowacki criticized the rate of wage increases over the past more than two decades, stating that it wasn't until the contract that expired in April that assemblers were earning 30 cents more than what he did in 1998.

Guernsey also pointed out that the contract dates from April 30, 2022, to May 2, 2026.

"We've been on strike now almost six months, so there's six months of that carved out," he said.

He also said that the final year wage increase would be in effect for only a couple of months and could potentially be used as justification for denial of future increases when negotiating the next contract.

"The last three months of the contract just means the first offer of the contract is null and void, because they're just going to say we just gave you 4%," he said. "Roughly around a 28%, 30% (wage increase) would be an acceptable offer. We're really only 7% off. We can get there in wages, but the biggest thing is health care."

Guernsey pointed to the lack of PPO premium caps in contract years four and five.

"We did say if a member wants to opt out and go to a different plan, they can and take that chance. But then again, that creates more pressure than the ones still on the PPO because, let's say we have 1,100 people in there and then 500 of them jump out, the 500 remaining or 600 remaining are going to have to cover the rest," Guernsey said. "So health care is really key."

Glowacki said, while the company has allowed current employees to retain their PPO plan, that offer is not available to new hires after 2022, causing the tier system that the UAW has been working for years to remove from contracts to leak into insurance.

"We're sick of second tiers," Glowacki said. "Everyone should be paid the same. Everyone should get the same benefits. Everything should be the same regardless of when you hired into the company. Now they're trying to create tiers in medical coverage."

Under the most recent offer, Case employees who opt out of the PPO can choose among three other insurance options, but those plans can change each year.

"At the beginning of any benefit year during the course of the agreement, they want to be able to change the terms of the coverage, and it just doesn't apply to simple things," Glowacki said. "When we negotiate a contract in the UAW, we always have a defined level of benefits that will remain the same throughout the duration of the agreement.

"We do understand that the premium share cost may go up from year to year because medical insurance goes up from year to year. That is a fact of life and we understand that, but when their proposal says they can change the terms of the replacement plan and it's not limited to those that affect coverage, premium contributions, plan design, deductibles, copays, co-insurance, out-of-pocket maximums, in and out-of-network limits and coverages, and wellness programs or designs, and then go on to say such changes will not result in elimination of health care or dental coverage, OK, so you're still going to give me an insurance policy that's not worth the paper it's written on?"

Furthermore, the more senior unionized employees would see wage increases under Case's most recent proposal.

Prior to the contract that arose from the six-month Case strike in 2004, employees were able to earn more money by working harder under an incentive pay model. In 2004, the company wanted to eliminate incentive work. The union fought against it on the argument that workers had established household incomes based on their yearly earnings under the incentive plan.

The company agreed to lock in those employees under what's called a "red circle" pay level.

"But ever since that pay level has been established, we don't get any general wage increases," Glowacki said. "We only got lump sum bonuses, and in this particular contract, they're not even offering that to the senior employees."

Guernsey and Glowacki said negotiations have been disappointing, especially given that it's the first contract since the COVID-19 pandemic hit and Case workers were deemed essential.

"Prior to the COVID outbreak, and how we got treated during COVID, this contract probably would have passed 90%. But COVID changed things," Guernsey said. "When a company ... puts people's lives at risk to build a product when you're constantly told you guys are essential infrastructure workers and we're going to make it right in your contract, and you come out and your first contract pass is 9% with inflation at the time that was going was 11%, it upsets people."

Guernsey anticipates loss of returning workers as strike drags out

Guernsey said many Local 807 members have gotten jobs since the UAW did away with provisions disallowing those it represents from earning more than what they earn in strike pay, and he expects that many will not return.

He estimates that number could be as high as 20% between both the Burlington and Racine plants. Union members receive strike pay as long as they complete four hours of strike duty per week. They do not have to notify the union if they don't intend to return to work once a contract is ratified.

Kim Alber, a union steward and trustee who recently took on the added role of financial secretary after that person left for a railroad job, is among the minority who haven't gotten another job amid the strike. She also oversees operations of the food pantry and strike kitchen in the Gulfport, Illinois, fire station, food largely donated by John Deere workers.

"For the most part, they're taking part-time jobs here and there," she said of her fellow union members. "A few have gone to Shearer's."

Alber said some members she has spoken to are earning less than they do at Case but still are considering not returning.

"I truly believe there's a few of them who have decided that Case doesn't really care about any of us and they just won't be back," she said.

Others have opted to cross the picket line and go back to work. Guernsey said eight of the UAW's full-time workers have gone back to work. Another 11 are workers who were not union members before the strike.

Guernsey anticipates that anxiety among strikers will grow as the holidays draw nearer.

"There are pockets of worry," Guernsey said.