Bargaining in good faith
This spring marks the 30th anniversary of the AHF Products Pre-Finished Hardwood Flooring plant in Beverly. The plant employs over 600 people from Randolph County and beyond, with nearly 475 of those employees belonging to Teamsters Local 175. The bargaining unit employees have been working without a contract since the previous one expired on Feb. 22, and the Company continues to stay in active communication with the union.
The importance of this plant to the local economy cannot be overstated. Our unionized employees make an average hourly wage of $17.60, and the entire plant workforce puts over $23 million per year in wages into the local economy.
The plant purchases $60 million of mostly West Virginia lumber per year. On average, 40 truckloads of green lumber arrive at the plant daily, and 20 loads of finished flooring leave. Countless loggers, sawmills, truck drivers, gas stations, repair shops, fabricators, and contractors depend on this plant, not to mention the restaurants, stores, and other businesses our employees frequent. The addition of the 85,000-square-foot distribution center last year also reinforced our commitment to the region.
Despite all these positives, our business realities are challenging. The overall hardwood flooring production footprint of the company has shrunk by 21 million-square-feet since 2017 when the last contract was negotiated. In addition, two wood flooring plants of Armstrong Flooring, the previous owner, were shut down during this timeframe. As the former Plant Manager, I poured my heart and soul into this plant for years and as I moved into this broader Company role that I hold now, I became more keenly aware how difficult this industry is and the infinite number of options available to our customers.This overall industry contraction is due to overseas competition and replacement products in the market. Today, a consumer can buy a multitude of flooring products that look like hardwood but that are not hardwood: ceramic tile, laminate, and luxury vinyl tile.
Recognizing these market complexities, the company has approached these labor negotiations with the intent to make fundamental changes to those requirements that hinder its competitiveness and impede its viability. We are very mindful of the fact that a successful contract needs to balance the best interest of the 600+ employees with that of our customers and all of those who rely on the long-term success of the plant. While there is disagreement over some operational issues that still need to be resolved, namely the company’s current inability to operate and have employees work on Saturdays except under very limited circumstances, the issues in dispute that have attracted the most attention are healthcare and retirement plan changes.
Why are we proposing to change the healthcare plan? The current plan is unfair. A contract from many years ago means about 10% of the bargaining unit workforce receives a generous family healthcare plan which they pay only 12% of the actual cost; this equates to $240 per month for full family coverage. The company’s proposal would bring more fairness across the board. So, although this 10% – or approximately 50 employees – would see a 92% increase in their premium share – from 12% of the cost to 19% (or $459 per month for family coverage), they would still be paying less than 20% of the total cost of their family’s healthcare, while the company pays the other 80+%.
To put this in perspective, manufacturing employees at other companies around the country are paying, on average, 27% of their healthcare costs. If the plant is to remain competitive it will need to closer align its costs to others in the nation.
There’s also a lot of misinformation about the company’s pension plan proposal. The facts are these: a small group of bargaining unit employees still participate in a pension plan. The company proposed freezing this plan while protecting all earnings to date for retirement. Additionally, the Company would enhance those employees’ 401K program by matching their contributions up to 6% of their salary for two years; the match would then transition to up to a 3% match thereafter. This match would provide these employees with an overall very attractive retirement plan.
Since the contract expired, our workforce has been on the job, producing beautiful West Virginia flooring for our customers. Company management and union leadership have remained in talks about healthcare, and are currently conducting a thorough review of a union-managed healthcare plan verbally proposed by the Teamsters on the second-to-last day of formal negotiations.
Unfortunately, the union keeps talking about a strike. We do not want a strike. When workers strike, paychecks stop, lumber slows down, and everyone suffers. This is harmful to all employees, their families, the local economy, and to the business. While AHF Products has taken every precaution to ensure it can operate the plant and continue to supply all of its customers, a union strike would only bring unneeded pain and should be avoided.
As we continue our discussions with the Teamsters, AHF Products is committed to bargaining in good faith and achieving a new contract that is good for our employees, our customers, our communities and our company.
Steve Bullock is the former Beverly Plant manager and is now the Vice President, Manufacturing for AHF Products.