Union's rejection of Timken contract surprises officials
Health care costs played a major factor when workers voted down the latest offer.
Bad feelings about higher health care costs appear to be the main reason workers at Timken Co. surprisingly rejected the steel and bearings maker's contract offer, a union leader said Wednesday.
Union negotiators had endorsed the deal that would cover about 2,700 employees in Northeast Ohio and secure about 900 jobs at three plants in the Canton company's bearings division. The company last month said it was pleased with the tentative deal.
However, the four-year proposed pact was rejected Tuesday 1,129 to 895, leaving leaders on both sides shocked and looking for answers.
Health care concerns
Stan Jasionowski, president of the United Steelworkers of America Local 1123, said Wednesday that a major factor was that the new contract offer required workers to pay a share of health care benefits -- up to $1,000 for an individual and $2,000 for a family, annually.
"I think that played into it," Jasionowski said. "Right now we pay nothing for our health care. There was some friction on that."
He said he would not go back for a second vote without meeting again with the company, which said it needs to meet with the union to figure out what's next.
"We are disappointed with the outcome," Don Walker, Timken's senior vice president, said in a Securities and Exchange Commission filing Wednesday.
Timken spokeswoman Denise Bowler said no new talks had been set as of Wednesday afternoon.
"I'm surprised," said Jim Vassas, a diemaker at Timken's steel plant. "I know there is a rising cost for health insurance. I thought it would pass because they are saving the bearing jobs."
Last May, Timken said it would close three Canton-area bearings plants over the next three years because the plants were not competitive. The contract would have secured jobs at those plants, which make round pieces of steel made to reduce friction in certain industrial applications.
The contract proposal also included raises of 3 percent a year on an average pay of $18.50 an hour, promises from Timken to invest millions of dollars in Ohio operations and job security.
There was division before the vote between some union members in steel making jobs and bearings workers because some steel workers believed the contract would do more to secure bearings jobs.
Jasionowski said he didn't think that division was a major part of why the contract vote failed. "But yes, there were some people who had some comments about that," he said.
Other workers in steel said they believed the company's offer wasn't lucrative enough given that high steel prices and insatiable demand have contributed to record profits for steel companies.
In April, Timken reported first-quarter earnings of $58.2 million, more than double from a year ago, mostly because of strong steel sales.
Kevin McKinney, a 17-year steel worker at Timken, told The Repository that he voted no "just for the fact that we're putting out more steel and breaking records. We need bigger raises."
Scott Mathie, who has worked at Timken for five years, said he was angry because Timken leaders "never really got our opinion, never found out what we wanted. They're making more money than they ever had, with a third of the workers."
The new contract would have become effective upon expiration of a current five-year contract Sept. 25.
Timken shares closed down three cents, or .12 percent, at $25.24 on the New York Stock Exchange.