IBEW LU 965 (Madison, WI. u&em) faces problems from Alliant Energy

http://www.madison.com/captimes/business/stories/66377.php

Alliant union gets serious
Health plan change, pay scale at issue
By Mike Ivey
January 30, 2004


Frustrated with the failure to reach a new contract after nearly a year of bargaining, the union representing some 1,430 employees at Alliant Energy is turning up the heat.

The picketing comes as Alliant today announced a slight increase in profits during the fourth quarter of 2003.

While nobody is talking strike, the International Brotherhood of Electrical Workers Local 965 is holding another round of "informational picketing" Saturday to press the utility. The union staged a similar demonstration earlier this week in front of the new company headquarters in the American Center.

Union leaders say the move is in response to Alliant implementing a new medical plan on Jan. 1, 2004. The union maintains that changing the health plan - the second increase in health care costs since the last pay raise in May 2002 - violates federal labor law because the contract is still being negotiated. Unfair labor practice charges have been filed with the National Labor Relations Board.

Earnings for the period were $48.6 million vs. $46.1 million in 2002. Earnings per share were down slightly for the quarter, however, from 50 cents to 44 cents because more shares were sold during 2003.

For all of 2003, Alliant said its net income was $183.5 million, or $1.81 per share, compared with $106.9 million, or $1.18 per share, in 2002. Earnings from continuing utility operations were up from $165.8 million to $197.2 million - an increase of about 19 percent.

"Our utility operations remain strong and will continue to be the foundation of our business as well as our primary growth engine going forward," said Bill Harvey, president and chief operating officer.

With the company on better financial footing, contract negotiations are to continue Tuesday in Madison.

Other issues besides health care are keeping the two sides apart, including setting a new pay scale. Two votes on a contract have been rejected by the rank and file, most recently on Dec. 19, 2003. The current contract expired on May 31, 2003 and the union has been working under an extension.

"Both of us have agreed not to bargain this through the media but we need to see some movement," said Shawn Reents, business manager of Local 965 and a 13-year employee.

Alliant spokesman Chris Schoenherr also declined to discuss details of the negotiations but said he was surprised the last offer was rejected.

"We thought we had an agreement," he said, explaining that implementation of the new health plan was necessary because the company had changed insurance carriers for 2004. "Because of logistics we had to start the plan. The risk of leaving employees with no health coverage was too great."

The last round of bargaining between Local 965 and Alliant - in 1999 - also wasn't easy. The union ended up rejecting three offers before finally approving a new contract after 10 months of bargaining.

Reents has since taken over leadership of a union rocked by scandal in February 2003 when longtime business manager Mick Koehler was convicted of embezzling $135,000 from Local 965 and sentenced to 25 months in prison. While the union was insured for $95,000 of the losses, the impact has lingered.

Reents said that Koehler's fraud had not only cost the union financially but has hurt recruitment efforts. He said the crime has been mentioned in some anti-union letters sent to workers Local 965 had been trying to recruit.

But labor relations between the IBEW and Alliant, formerly Wisconsin Power & Light, have historically been agreeable. There has been no talk of any walkout since a bitter contract dispute in the mid 1960s.

The union this time is pressing Alliant on the same issue that angered many shareholders and sent the company's earnings for a setback a year ago: the utility's commitment to its "core business."

Ill-timed ventures in energy projects in Brazil and Australia, along with investments outside the energy sector, had put a drag on profits. While Alliant has since moved to sell off some of those assets, Reents said he is not convinced the company has its priorities in the right place.

"When Alliant fails to commit to our utility and the people who do the work to keep the lights on and gas flowing, it's not just workers who lose," he said. "It's also customers and shareholders who lose."

Jim Cavanaugh, president of the South Central Federation of Labor, also criticized Alliant for trying to overturn Wisconsin's Utility Holding Company Act, which limits outside investment by state utilities. Alliant eventually took its case all the way to the U.S. Supreme Court, which declined to hear it.

"If the company put the kind of effort into putting together a contract with Local 965, this contract would have settled months ago," said Cavanaugh.

Alliant's Schoenherr dismissed those gripes, saying the company is moving in the right direction. He noted the utility generated $875 million for debt reduction in 2003 by exiting "non-regulated business," announced a new generation plant for Sheboygan Falls and put more than $300 million of equity back into utility operations.

Schoenherr said the union should stick with focusing on a "fair and equitable" agreement and not get sidetracked with other issues.

"The facts bear out that virtually every action Alliant Energy has taken this year is focused on our utility business," he said.