The way the union retirees of the old Western Electric plant in the Millard area see it, the money is theirs and that’s that.
And there are many hundreds — perhaps thousands — of them in the Omaha area.
What has made them mad? They say it is a simple case of a large corporation raiding their pension plan — the improper transfer of assets from their prosperous fund for hourly folks into an underfunded one for management and salaried workers.
“Theirs is running dry, and now they want to make it up by taking from us,” said Ray Sempek, a tool and die maker at the plant that manufactured telephone equipment such as cable and switching gear.
At issue is the money that company leaders want to transfer from a national pension plan for the union workers to the one for salaried employees. The union members say their collective bargaining agreements with the company prohibit any asset transfers that would benefit people who weren’t part of the original contract.
The dispute is the subject of a lawsuit filed by the Communications Workers of America and the International Brotherhood of Electrical Workers, the unions that represented the Western Electric employees in Millard.
The company also has raised its own points in court. It has argued that the Communications Workers of America doesn’t represent the retirees anymore. Also, the company argues, it is up to management to decide if it is best to use company money or surplus pension trust money to fix retirement plan deficits.
The company also says the pension funds for the hourly union workers are fully funded and in no danger, and no one is missing out on any benefits. The individual pension funds at issue are all part of one larger trust, the company says, so it is just one big pot of money anyway. The lawsuit is ongoing.
The chain of responsibility for the pension plans that cover the plant’s retirees is a bit of a corporate soup. Starting in the 1950s it was Western Electric (itself a unit of AT&T), Ma Bell’s gigantic equipment-making subsidiary. Later it was owned by others in the telecommunications industry, going by a number of different names in the final years, ultimately closing for good in 2011, long after the industry’s court-ordered breakup and rise of the cellphone.
Custody of the pension plan eventually passed to a French telecom company called Alcatel-Lucent, after some corporate combinations created that company. Last year Alcatel-Lucent agreed to be bought by Nokia, the Finnish maker of telecom hardware.
And that, union retirees say, is when they started getting the raw deal.
“Nokia recently purchased Alcatel-Lucent,” reads a letter that union members are sending to elected officials nationwide. “Positioning themselves for the acquisition, the company moved 20,000 retirees and $3 billion in assets from the workers’ pension plan to their underfunded, mismanaged management pension plan.”
It is the $3 billion that is at the heart of the lawsuit filed by the unions last year in U.S. District Court in New Jersey that seeks to block the asset transfer. The lawsuit says only $1.8 billion of the $3 billion is required to pay for the benefits due the 20,000 retirees being transferred from one plan to another.
As for the remaining $1.2 billion, Communications Workers of America Vice President Lisa Bolton in November decried it as “the worst kind of corporate raiding.”
Telephone and email messages left with officials for Nokia, and the lawyers defending the New Jersey lawsuit, were not returned. The $17.7 billion takeover of Alcatel-Lucent by Nokia became official this year. Cost savings forecast by the combined company from eliminating duplication come out to about $1 billion.
For its part, Alcatel-Lucent — the company responsible for the pensions last year when the lawsuit was filed — said “this action should not have been brought,” according to its lawyers in papers submitted last month.
“Alcatel-Lucent implemented a redesign to its pension plans that bolstered their financial stability and left unaffected its commitments to the unions and its retirees,” the lawyers wrote.
Union retirees say they can’t help but think the worst. The company, the New Jersey lawsuit says, is using pension plan money for deficits that should be addressed with general corporate revenue.
“If they want to shore things up, it should be with company money,” said Alton Mumm, a former telephone equipment installer at the Millard plant who is now the president of the Communications Workers of America Nebraska Council.
The lawsuit so far is progressing as complex ones do. The judge in the case has declined to issue an order temporarily restraining the company from transferring the assets, saying there is no pressing urgency.
In Omaha, almost 8,000 people worked at the Western Electric plant at one point in the 1970s. Today, several big-box retailers fill the site between 120th Street and 132nd Street along L Street.
The links still remain among many of the Western Electric plant’s retirees, two dozen or so who met late last week to discuss the situation at the Peony Park Hy-Vee. On average, each had worked at the plant for about 32 years.
“We all here are in the same boat,” said Virginia Busch, president of the Communications Workers Local 7400 retirees chapter. “It is about our pension.”
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