Friday, July 27, 2012

Governor Brokers Deal To End Con Ed Lockout

With a firm push from governor Andrew Cuomo, the utility and the union representing its 8,500 locked-out workers agreed on a new, four-year contract. After weeks of tough negotiations, both sides credited Gov. Andrew Cuomo with changing the tone of the talks Thursday when he called them into his office to discuss the potential impact the storm could have on electrical service.

Consolidated Edison Inc. and its locked-out union workers reached a new, four-year contract Thursday afternoon, ending a 26-day standoff hours before a severe storm was expected to hit the New York City area.

Con Ed and Local 1-2 had made some progress with the help of federal mediators, but both the company and union said that Mr. Cuomo's intervention Thursday helped to bring about the deal. Neither side would immediately release details of the agreement.

Several sources said the union agreed to switch new hires to a cash balance pension plan from a defined benefit one. Con Ed pushed hard for the change, which had been a major sticking point in negotiations. Existing employees will maintain their current pension plan, the sources said.

The contract includes provisions that protect work of current and future union members, a significant issue since the company relies heavily on outside contractors. Con Ed had been seeking to increase workers' contributions towards health insurance to 24% from 17%, but the agreement focused more heavily on cost savings than significant out-of-pocket increases, sources said.

It’s not clear what wage increases the union won, though Con Ed had been offering raises of 10% over four years if the union agreed to give up the defined benefit plan for new hires.

"Under the governor's leadership we came together and resolved those issues," said Kevin Burke, Con Ed's CEO. "What's great is that all of our employees can go back to work and continue to provide the great service to New York that they have been providing for a long time."

Thursday marked the first time that Mr. Burke personally participated in the negotiations. Mr. Cuomo called leaders of the union and the utility into his office Thursday morning and got them to agree that 3,000 electrical workers would return to their jobs immediately.

"The combination of a possible storm and the labor situation at Con Ed was obviously a dangerous situation," Mr. Cuomo said at a press conference at his midtown Manhattan office. "We don't want to see a storm hit New York, down power lines and Con Ed not be at its maximum capacity. That potential danger has been averted."

After that initial press conference, talks continued, and the two sides were able to come to terms on a new contract. "Sometimes a storm has a silver lining," Mr. Cuomo said.

Mr. Cuomo said that his direct involvement in the talks came as a result of the pending storm. But he may also have been influenced by a growing chorus of voices worried that widespread loss of power was only an incident away.

The state Assembly held hearings Wednesday into Con Ed's performance during the lockout. That same day, the City Council's Black, Latino and Asian Caucus held a rally calling on the utility to increase its transparency during the lockout. A hard-hitting column in the New York Times suggested the governor was standing by while the city was at risk of a blackout.

"It wasn't easy," said Harry Farrell, president of Local 1-2. "It was probably one of the toughest contracts I've done in a while. With the governor overseeing this process, it really helped us move this along."

The deal still has to be approved by the union's executive board and ratified by its members. After that, Con Ed's board will vote on the deal, too.