CNH Industrial will be withdrawing health care coverage to the unionized employees on strike at its plants in Burlington, Iowa, and Racine, Wisconsin, as of Saturday, May 14.
More than 1,000 United Auto Workers members called a strike at the two plants owned by the Case and New Holland construction equipment manufacturer on May 2.
While CNH officials have stated a willingness to return to the bargaining table, there has been no movement toward any resumption of talks since the strike got underway.
“Before the strike started on May 2, representatives for CNH Industrial and the UAW spoke about how to handle health care coverage of striking employees during the strike,” Rebecca Fabian, CNH Industrial North American communications manager, said. “As a result of that discussion, both parties agreed that the provision of health care benefits would transition from being provided by CNH Industrial to being provided by the UAW.”
According to Fabian, the transition on May 14 will result in no gap in coverage for striking employees. UAW leadership had no official comment on the health care coverage transition.
Per the UAW website, funds for the health care coverage are covered by the UAW Strike and Defense Fund. The organization most recently reported having about $790 million in that fund. In addition to health care, the fund also supports the weekly “strike pay” of $275 for members who are actively participating by serving on committees or walking the picket line during the strike.
The benefits are either paid directly by the fund according to the company’s current plan or by having the fund make COBRA payments to the company plan.
Employees eligible for the health care benefits are members in good standing on the day before the strike, on the active pay roll at the start of the strike and actively participating in the strike in committee or picket assignments. Since the strike began, union members have been working in four-hour shifts to maintain the picket line.
One stipulation also noted about the UAW health care coverage is that it is limited to medical and prescription drugs and does not include dental or vision.
Until this action, the CNH strike seemed to be an echo of the John Deere walkout in October that lasted five weeks. That work stoppage concluded with the employees receiving 10% raises and improved retirement benefits. John Deere never transitioned the health care coverage during the five-week strike that involved 10,000 unionized workers.
This is not the first time CNH has played a rougher hand with striking employees. The last strike at the two CNH facilities occurred in 2004. At the time, a 72-month contract between CNH Industrial and plants in Iowa, Wisconsin, Minnesota and Illinois expired May 2. Although workers overwhelmingly rejected a “final offer” from the company on May 8, no strike was called until November 2004.
After 19 days, UAW workers agreed to end the strike after CNH reportedly said talks were at an impasse and appeared to be willing to continue to negotiate. The company then locked out the workers while continuing operations with temporary workers and salaried employees. The lockout lasted an additional 17 weeks and concluded with a new labor agreement that was only slightly adjusted from the company’s original final offer.
It is not clear if the transition of the health care benefits is another tactic to dissuade the strikers from maintaining their positions on the picket line.
Based on discussions with representatives from both parties, CNH and UAW are apparently not close regarding the economic terms of a new labor agreement. Neither side has provided specific details as to where negotiations broke down, although UAW workers are looking for increased wages, more flexibility on time off, reduced overtime and more awareness of a safe work environment.
From the onset, CNH has maintained its intention to continue operations at the plants and has done so with salaried employees and temporary workers brought in to replace those on the picket line.
At least one UAW representative has suggested that he believes the strike could last up to six months.