Metro statement on collective bargaining with ATU Local 689
Metro management regrets the decision by Amalgamated Transit Union Local 689 to abandon contract talks. Management remains open to a compromise that is fair to our valued employees and addresses the substantial financial challenges facing Metro.
Metro is advising customers that the move from collective bargaining to arbitration has no impact on bus and rail service.
"The Union's proposal to increase wages and benefits by $213 million over the contract period ignores the financial reality of the region and would threaten the viability of the transit system," said General Manager and CEO Paul J. Wiedefeld. "Our proposal would have maintained previously negotiated raises for lower-wage workers in combination with savings in other areas. Management remains open to a compromise settlement that is not only fair to our valued employees but rationally addresses the substantial financial challenges facing Metro."
Metro's management's objective throughout the negotiations has been to preserve the jobs and pensions of existing employees. That can only happen if Metro has a sustainable business model.
Management's negotiating position included:
- Preserving pensions for existing workers and retirees
- Preserving existing jobs
- Preserving previously negotiated wage increases for lower-paid workers
- Proposing wage freeze that only impacts top earners
- Establishing a 401k-like plan for future workers
"Failure to address Metro's financial challenges will put jobs and benefits at risk. Business as usual will not work for employees, for people who depend on us for transportation or for the taxpayers who subsidize our system," Wiedefeld said.
The primary obstacle to a negotiated settlement centered on pension benefits.
Metro has proposed steps to make the retirement plan more sustainable by responsibly restraining future growth. There are many ways to do that, including limiting overtime in the pension calculation, increasing employee contributions for health and pension benefits to bring them more in line with employee plans at our funding jurisdictions, adjusting the retirement age, imposing a temporary wage freeze on top-earning workers, and eliminating automatic triggers that increase benefits well beyond standard practices. All of these details were negotiable.
"I am hopeful that the arbitration process will result in an appropriately restructured labor agreement that recognizes Metro's financial reality and achieves these important goals." Wiedefeld said.
Key facts about Metro wage and benefit costs:
- Wages and benefits account for 70% of Metro's operating costs
- Benefit costs are growing 2.5 times faster than revenue
- The retirement benefits for the Local 689 bargaining unit far exceed benefits for government employees in nearly all of the Metro-area jurisdictions that help subsidize the system, including the Federal Government
- Unlike most pension plans, benefit calculations for the Local 689 bargaining unit factor in all overtime pay worked in the years before retirement, and current retirees' benefits increase each year based on the percentage of any wage increase for active employees instead of reflecting changes in cost of living