Join Us

Sign up for the lastest information from the IBEW!

Related ArticlesRelated Articles



Print This Page    Send To A Friend    Text Size:
About Us
Unions Sue Asarco Inc. Over Retiree Health Care Cuts

January/February 2005 IBEW Journal

Asarco union retirees and supporters gather at federal court house in
Tucson, Arizona, to protest against Grupo Mexicos attack on health
care benefits.

Youre sitting on your porch, enjoying another day of retirement after a lifetime of work in Arizonas copper mines and smelters. Youre not rich, but youll survive on your union-negotiated pension and health care benefits. Or so you thought.

Thats until a stranger shows up at your front door to serve you with court papers. Youre not involved in any court case. Whats the deal?

Youre being sued by your former employer, American Smelting and Refining Company (Asarco Inc.), now a division of Grupo Mexico SA, one of the worlds largest mining companies. Whats the charge? You are still collecting medical benefits and Grupo Mexico is sick of paying the bills.

This isnt a joke. This is the cold reality for a growing number of retirees in America, including those of IBEW Locals 518 and 570 who spent decades maintaining Asarcos mines and processing facilities in Hayden, Ray and Silver Bell, Arizona.

A recent article in The Wall Street Journal described the latest tactic by employers to escape the growing costs of providing health coverage to union retirees. In mid-2003, Asarco Inc. sent letters to retirees notifying them of an increase in their health care premiums. "As it did so, " reports the Journal, "the copper company sent summonses to some retirees in Arizona, where many live, telling them they were defendants in a suit it was filing."

The suit cites a paragraphinserted in the 1993 health planthat says: "The company reserves the right to amend or terminate the plans at any time for any reasoneven after you retire." Asarco, like other employers, also contended that retiree benefits are subject to "duration clauses," meaning that they expire simultaneously with labor agreements.

Chuck Yarter, a retired steelworker, discussed the cuts in health care and prescriptions in a Labor Day speech that was re-printed in The Rumble, a newsletter from the Solidarity Council for Justice, a group of eight unions, including the IBEW. Before the cutbacks, Yarters yearly pension was $12,214. Medical deductibles were $150, leaving him with $12,064 per year.

After the cuts, Yarters deductibles rose to $2,500, leaving him with only $6,450 for the year. He says: "We retired Americans are now under attack by the very companies that benefited from our working years."

Unions representing workers at Asarco are fighting back. The Solidarity Council for Justice held a rally of hundreds of copper retirees and supporters at the Federal Courthouse in Tucson in September. Council members have also met with union leaders from Asarco/Grupo unions in Mexico and Peru to discuss common problems.

The IBEW, the United Steelworkers of America and the International Chemical Workers have filed a counterclaim to enforce contractual obligations for lifetime retiree medical benefits.

Rejecting the mining giants allegation of "severe financial distress," the unions point to exorbitant salaries lavished on upper management.

Mike Verbout, assistant business manager of Tucson IBEW Local 570 says that Grupo Mexicos downsizing has compounded retirees problems, forcing them to "run around to get answers to medical benefit questions."

There wont be any answers coming from the federal government. A U.S. Department of Labor spokesman said that pensioners "arent our constituents anymore."

Grupo Mexicos combative stance on retiree health care mirrors their relationship with the active work force. The contract between Grupo Mexico and IBEW, USWA and other unions has expired. After years of failing to maintain their own plants and equipment, Verbout says, "now they want concessions, under the implied threat that they wont invest in future operations."

The copper region of Arizona has a history of vicious labor-management conflict from a 1917 strike and another pivotal strike at Phelps Dodge in 1983. The company hired replacement workers and eventually decertified locals of the United Steelworkers of America, a move that has been cited as a turning point in U.S. labor relations.