Honeywell Spending More To Keep Workers Locked Out Than Cost of Their Demands

Mike Elk

The locked-out workers of USW Local 7-699 in Metropolis, Ill., are claiming that their company, defense contractor Honeywell, is spending more money to keep its workers locked out than what it would cost to give the workers what they are demanding. Honeywell wants to cut retiree healthcare and pensions entirely for new hires and increase their healthcare contributions to $8,500 a year (see more about the Honeywell lockout here).

USW spokesman John Smith claims that, according to calculations done by the union, it would cost Honeywell a total of $20 million over the three-year life of the contract for workers to keep their health and retiree benefits at current levels. Union officials say that Honeywell has already spent or lost at least $48.8 million to keep the workers locked out of the facility.

This figure includes the costs of contracting at scab labor estimated to be $20 million, an estimated $5 million to house, feed, transport, and provide additional security for the 300 scab labor working inside the plant, and $2.5 million for overtime pay for management working extra hours. This figure does not include legal costs for Honeywell, which has sued the union for their picketing activities.

Additionally, the plant has lost at least $22 million in production in the 11 weeks the plant was shut down. Honeywell plant manager Larry Smith confirmed that the plant lost $2 million each week for the 11 weeks the plant shut down — a total loss of $22 million for the company.

Union officials claim it’s outrageous for Honeywell to claim they do not have $20 million to maintain their current health and retiree benefits over a three year period when the company is willing to lose $22 million alone through lost production.

So why is Honeywell willing to spend more money to lockout its workers for six months (they were locked out in late June) than to just give the workers want they want?

The company employs several thousand workers scattered among a number of different unions at Honeywell facilities throughout the country. By showing that Honeywell is willing to hit its workers hard at the Metropolis facility, it’s sending a signal to its workers throughout the country: Either give into the company demands or endure the months of financial hardships and missed mortgage payments like the workers at Honeywell’s Metropolis facility are enduring.

For decades, Honeywell didn’t engage in hardball union tactics with its employees. Likewise, it did not use political contributions to lobby for its special interests. Honeywell had refused to get involved in political giving under former CEO Lawrence Bossidy, who left in 2002. Now under new CEO David Cote, the Honeywell Corporation, having given $3 million in PAC contributions, is the number one political donor in the country, according to a report released yesterday by the Center for Responsive Politics.

Honeywell has used this political clout to win $13 billion worth of federal contracts, mainly in defense spending, during the last ten years, leading to record profits. The company is on the verge of expanding massively, in large part because it has received several contracts under the stimulus to make hybrid batteries.

Now Honeywell is seeking to prevent defense spending cuts by using its political clout to prevent it. It has increased its political giving by almost 400% since Obama, who has flirted with defense cuts and contractor reform, came to power in 2008.

But that’s just the beginning. Honeywell has used its political clout to get Cote on the Obama’s deficit commission in order to prevent defense cuts. Cote so far has pushed back against calls by Senator Tom Coburn (R-OK) to cut waste in the military by suggesting instead that the military cut the pay of its troops overseas (many of whom are already relying on food stamps) and make them pay for their own healthcare. Cote has also supported cuts to Social Security.

Honeywell has also faced accusations that it’s used political clout to get the Nuclear Regulatory Commission (NRC) to approve allowing undertrained scabs to work with enriched uranium at the Metropolis facility. In the 60 plus years the union has represented the Metropolis uranium facility, the Commission has never allowed scabs to be hired during a lockout.

Given that the Metropolis plant is the only conversion facility of its kind in the United States, familiarity with the plant, and not just generic experience in the field, is key to ensuring the plant’s safety. This time around, the company worked with the NRC for more than a year to draw up acceptable contingency plans for hiring temporary labor — and was ultimately granted permission to do so.

So, to recap: Honeywell under CEO David Cote is willing to do whatever it takes to provide Wall Street investors with ever expanding profits, including (paradoxically) losing massive sums of money to bust its union.

The question of the hour is: Are the labor and progressive movements willing to stop Cote from his drive for unlimited corporate profits at the expense of workers? The answer in Metropolis is Yes,” as union members pledge to remain out on the picket line for as long as it takes to win a contract to their liking.

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Mike Elk wrote for In These Times and its labor blog, Working In These Times, from 2010 to 2014. He is currently a labor reporter at Politico.
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