By Lara Updike
At midnight Oct. 1, the union contract at Kennecott Utah Copper expired after months of negotiation and rumors of strike. At press time Sept. 30, the bargaining continued with neither side willing to speculate whether it would end in agreement, impasse, or an extended deadline.
About 12,000 of the mine”s 16,500 employees are unionized, but Kennecott spokesman Louie Cononelos said in case of strike the company”s salaried workers alone could temporarily operate the mine.
The sticking point at the bargaining table was Kennecott”s plan to increase the cost of medical benefits for employees as it faces lower copper prices and higher medical insurance premiums.
“There were some statements made that the company was trying to end retiring medical benefits. That is, in fact, not true,” Cononelos said. “We have recently sent a letter to our retirees, letting them know that their retired medical benefits will continue through the end of the year.”
“There will be a new benefit in place in January and there will a slight increase in the annual deductible, of $10 per individual and $20 per family,” Cononelos said. “Now realize that most companies don”t even give retirees medical benefits.”
The two sides also argued over the length of the new contract. Kennecott wanted a five-year agreement to terminate at the same time the life of the open pit mine will expire, said Craig Jones, financial secretary at the local office of U.S. Steelworkers of America. Jones said Kennecott will have to begin mining underground in five years.
Kennecott likes long contracts for purposes of planning and stability, Cononelos said, while unions like short contracts.
Jones said the union usually tries for three-year contracts so it can periodically haggle over cost-of-living increases. But the union gave in to Kennecott and signed a six-year deal at the last round of negotiations in 1996.
This compromise turned to the union workers” advantage, Jones said.
“After we signed our last contract, the economy kind of took a nose dive,” Jones said. “So we were able to keep getting raises where maybe we wouldn”t have had any bargaining chips if the contract had ended.”
The price of copper is little more than half what it was during the last contract negotiation six years ago. Kennecott shut down a concentrator last year, resulting in several hundred layoffs.
Kennecott”s production has been curtailed by about 20 percent, Cononelos said. He said half of U.S. copper production is idle.
Originally Kennecott is the second largest producer of copper in the United States, supplying 15 percent of America”s copper demand.
Currently one half of us copper production is idol. Our production has been curtailed by about 20%, we shut down one of our concentrators a year ago.
Located about 25 miles southwest of Salt Lake City, Kennecott Utah Copper is the second largest producer of copper in the United States. It operates the world”s largest open-pit copper mine 24 hours a day, seven days a week.