Early-retirement plan may limit expected layoffs at Kennecott
Unions representing workers at Kennecott Utah Copper's Bingham Canyon Mine agreed Wednesday on an optional early-retirement package that could cut the number of layoffs expected later this month by up to 275 employees.
That's the number of workers whose ages and years of service qualify them for the package, said Wayne Holland, chairman of the bargaining committee for four unions represented at the mine, where a massive landslide occurred last month.
The package is patterned after a pension plan "that has been in place for decades," Holland said. "It's intended to apply in cases where you had a plant closure or a massive number of displaced workers."
It isn't clear how many people are likely to accept the package, which comes with a $20,000 one-time cash incentive. Workers who qualify have until June 1 to decide whether to accept the package, Holland said.
"It's a very personal and individual decision. I don't imagine any way the number will be over 200. You know, it's just so hard to guess," he said.
The United Steelworkers, International Brotherhood of Electrical Workers, Operating Engineers and Machinists unions represent about 1,800 Kennecott workers. On May 2, the company informed the unions that an unspecified number of Kennecott's 2,100 employees will be laid off some time this month because the unprecedented landslide is expected to cut ore production by 50 percent this year, said Holland, who also is an international staff representative for the Steelworkers.
While the bulk of the layoffs will affect hourly workers, Kennecott has raised the strong possibility that some salaried employees will be furloughed, too.
"This is optional," Kennecott spokesman Kyle Bennett said. "We are offering this to all eligible bargaining-union employees. We don't know how many will accept it ... but the more people who take the early option [it] will reduce the number of people [who are laid off] later."
Employees who elect to retire must fit into one of two options. Under the more likely option, a worker's age and years of service must add to the number 80. So if the worker is 60 years old, he or she must have worked for Kennnecott at least 20 years.
A more difficult option requires that the employee must be at least 55 years old and have a minimum of 10 years with the company. Even so, the combination of age and experience must add to 70. So if a 55 year old hopes to retire, he or she must have worked for Kennecott for 15 years.
Financial terms of the package are based on years of service multiplied by $44 a month. Using that formula, an employee with 35 years of service will receive a pension of $1,540 a month.
The employee also will receive $300 a month until age 62, when he or she is eligible to receive Social Security benefits.
Bennett said the company is setting up a hot line and will provide private sessions for employees who want to learn more about their options.
Kennecott early-retirement options
Option 1 • A worker's age and years of service must add up to 80
Option 2 • A worker must be at least 55 and have worked at least 10 years for the company, and the combination of age and years of service must add up to 70
Benefits • Plan includes a $20,000 one-time incentive. Other terms are based on years of service multiplied by $44 per month.
Source • Kennecott and labor unions