As I had told you before the negotiations, the motion picture industry pension and health plan was projected to suffer a deficit of $350MM through 2015. This did not take into account our desire to continue the 13th and 14th check for our Retirees who retired prior to 2009. If we included them, the deficit balloons to $425MM. For the first time ever, as a result of the 2008 market crash, there was a deficit of $425MM that had to be addressed in negotiations.

The IATSE began their negotiations in early March. This was not our negotiations! The IATSE starts first, particularly on the Pension, Health & Welfare and if both parties, the AMPTP & IATSE, agree, then we either accept it or strike and get out of the plan.

The IATSE and the AMPTP allowed Local 399 to observe their negotiations because we were next. Their dispute involved the issue of the payment of premiums to the Health Plan. We were against any concept of premiums whatsoever.

For your information there are 18 Management Trustees and 18 Union Trustees. Representing the Union Trustees are 13 from the IA and 5 from the Basic Crafts. If the bargaining parties—the IATSE and AMPTP—recommends changes to the Health and Pension plan, the Basic Crafts are powerless to stop the changes because the vote would be 31 to 5, with the IA and the AMPTP joining forces. The only option left to us is to accept or strike and get out of the plans. This is unlike what happened approximately 9 years ago, when the IATSE agreed to a 23% wage decrease in television, contingent on the Teamsters and Basic Crafts agreeing also. At that time as the Director of the Teamsters International Motion Picture Division, I immediately called a meeting with the International. With the support of the entire Teamster Nation ready to honor 399’s picket lines, the Studios backed off. Thus, we saved the IATSE’s asses too. What I am saying is that we don’t automatically agree with the IA, especially if they are going the wrong way.

On Tuesday April 3rd the Teamsters and the Basic Crafts commenced negotiations for our contracts.

  1. The Producers proposed to the IATSE and the Basic Crafts that Active employees pay a premium of:
    – $62.50 per Active Employee,
    – $125 per Active Employee plus 1,
    – And a $187.50 per Active Employee plus Family.
    They eventually withdrew all the above.
  2. They also proposed:
    – $31.25 per Medicare Retiree,
    – $62.50 per Medicare Retiree plus 1 and
    – $93.75 per Medicare Retiree plus Family.
    Withdrawn
  3. In addition, the Producers proposed to increase from 400 to a 1,000 the number of hours it would take per calendar year to earn a qualified pension year as well as increasing the number of years to qualify for Retiree Health from 15 to 20 years. Withdrawn
  4. They also wanted to eliminate early retirement. Withdrawn

Because we were against the concept of premiums, we made a comprehensive proposal to the Producers indicating that we were willing to utilize a part of our upcoming raise to fund the shortfall in the Motion Picture Health plan. The Producers summarily rejected our proposal, indicating that they were wedded to the concept of premiums. Even though the Producers rejected our proposal, I believe that our concept had a tremendous affect on the Producers, which ultimately kept the premiums quite low. Remember, they originally wanted a much higher premium.

Since the Teamsters and the Basic Crafts do not control the Motion Picture Health and Pension plan (we only have 14% of the Directors—making us the tail not the dog), it was obvious to us that we needed to make sure that if premiums were going to be charged they had to be at a minimum. That is why we ended up with our current contract. Keep in mind no matter how much we protest, the IATSE and the AMPTP control the Trust Fund with their majority votes. Although the IATSE controls the Trust Fund with their majority votes, 399 and the Teamsters control the streets Nationwide. Their majority votes in the Trust Fund will not stop us if we are getting “screwed.”

  1. We stopped them when they wanted to get rid of grouping. The IATSE didn’t.
  2. We stopped them when they wanted a 23% cut in wages in TV, which the IATSE agreed to and saved their members too.
  3. We stopped them when they wanted to keep Core.
  4. We will continue to stop them on any roll backs, but we will strike only for the right reason. The Producers know that.

So the AMPTP agreed to put $225MM in hard contributions ($1 per hour in the first year) into the Trust Funds. 1 dollar x 75,000,000 hrs = 75 million dollars for 1 yr. Times 3 yrs equals 225 million dollars.

They also agreed to settle a lawsuit worth an additional $14.7MM (Non-Affiliates), for a total of 240 million dollars.

So if the Producers proposed $240MM from their side to resolve the $425MM deficit, what are the Unions’ proposal to help cut the deficit down?

We at Local 399 felt that taking 1% out of your wage increase for the first year only would be the best way to go with no roll backs and no premiums. No one wants premiums, and our 1% would contribute over 78 million dollars, more than the IATSE’s proposal which was worth $35.7 MM. However, as it turns out the amount of premiums agreed to by the AMPTP & IATSE ended up being less costly to the membership.

The premiums being charged are:

  • $0 for Active Individuals and Retirees
  • $25 per month for Active Individuals plus 1
  • $50 per month for Active Individuals plus Family (irrespective of size)

payable quarterly. And the Retirees pay zero. The Retirees will also get their 13th and 14th check because it was agreed to reallocate 30.5¢ out of the I.A.P. The 6% remains untouched.

According to the Plan’s statistics:

  • 41% of the Active participants are single and would pay $0.
  • 29 ½% of the Active participants are single plus 1 would pay $25 per month.
  • 29 ½% of the Active participants are single plus family would pay $50 per month.

Because such a large percentage of our membership would pay no premium, the 1% wage diversion that we proposed from the wage increase of 2%, 2%, 2%, compounded would be a greater cost to our membership than a premium. We could no longer justify our proposal as against the very minimal and cheaper premium which was negotiated. Because the premiums are so low I will not condemn the concept. I am not thoroughly convinced that our proposal is not the way to go, however, neither the AMPTP nor the IATSE were willing to consider it.

We did not negotiate the premiums. However, we were an integral part of keeping the premiums low. If we did not make our 1% proposal after the IATSE and AMPTP broke off, I feel that these premiums would have been higher.

My last comment Re: Facing the $425MM Deficit for the First Time ever:

  1. Although the IA’s proposal may be cheaper than our proposal, what about 3 years from now?
  2. Right now their cheaper Premium Proposal would generate 35.7 million dollars for 3 years. It may not be enough, but the Producers want it no matter what.
  3. Our proposal is 1% out of the wages for the 1st yr would guarantee $78.75MM. (35¢ x 75MM hrs = $26.25MM x 3 yrs = $78.75MM). $78.75MM would be more than needed. More than the IATSE’s premium of $35.7 million, but the Producers didn’t want our proposal. They are wedded to the cheaper Premium Proposal. Why? Because they want their foot in the door.
  4. Our proposal is based on guaranteed hard money. No guessing and it covers everyone.
  5. The cheaper Premium Plan is based on speculation. No one knows about the future.
  6. Most important of all is that I know that most people hate signing checks every quarter, and I know that they will be ticked off if they have two checks to sign per quarter instead of one. I relayed this to management and the IA. The IA still says that their plan is better and cheaper for their members. I said no when it is based on speculation because the numbers can change.
  7. The fact that the Premium Plan is cheaper for the members for the next three years and that the Producers have already committed $240 million hard money from their side toward the deficit, they are willing to risk everything to get the job done.

What are our options??? Not too much. Since it was ratified by the IATSE membership, the IATSE Directors of the health fund along with the AMPTP Directors will implement the premiums. We have 5 votes out of 36. We’re still the tail not the dog. If we wish to participate in the Motion Picture Pension and Health plan, we must accept the premiums and hope that the 0, 25 and 50 dollar premium is sufficient to overcome the shortfall. The only other option left is to strike and get out of the plan, but it will be foolish to strike on a contract that has wage increases and no takeaways. My biggest fear is three years from now, if the cheaper premium plan doesn’t work, the premiums will be increased. We will approach that problem when the time comes.

At the conclusion of the negotiations we made it clear to the Producers that in the event the 0, 25, and 50 dollar premium concept does not work, it will be the position of all the Basic Craft unions that we are going back to our initial position—that cost increases in the Pension and Health plan will be paid for through employer contribution and employee wage diversion, if necessary.