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April 20, 2018

4/14/2018 11:10:00 AM
Union Ratifies New Contract With WestRock
State Editor

Covington Paperworkers Union Local 675 has ratified a six-year contract with WestRock Co.

Fifty-four percent of union members casting ballots Wednesday voted in favor of the contract. The vote was 299-252.

Union leaders had urged the rank and file to reject the contract offer and return to the bargaining table in hopes of negotiating a better deal.

“Yes, I am disappointed with the vote, but we’ve got to move on,” Bob Booth, president of Local 675, said Thursday.

The six-year contract is retroactive to 2016, meaning the union and company will return to the bargaining table in four years. The contract expires Dec. 1, 2022.

“We’ve got to move on and get our union membership built back up. Negotiations are just four years away,” Booth said.

The agreement covers approximately 800 hourly workers at the Covington mill.

Booth said there were 589 union members eligible to vote Wednesday.

The agreement calls for workers to receive a 2 percent raise in four of the six years.

The 2 percent raises for 2016 and 2017 are retroactive. Workers will receive 2.5 percent raises in November 2018 and November 2019.

The company also agreed to pay more toward workers’ pension benefits, starting in 2019. The pension benefit will increase to $62 per year of service by the end of the contract.

Booth said a major sticking point in the negotiations was the company’s desire to change policies for overtime pay and premium pay for holidays. In October, the union voted 94 percent in favor of rejecting a contract offer from the company.

But when WestRock resumed negotiations with the company earlier this year, the company offered a one-time cash payment of $15,000 in return for the changes in the overtime and premium pay.

Booth said the company had orignally offered to split the $15,000 into two payments.

“We knew the vote Wednesday would be close because the company had made some improvements to its original offer,” Booth said.

However, he said the changes in the pay policy will cause some workers to lose money over the longhaul.

“The company is highly profitable. The company is making more than $200 million a year in Covington alone. I think if the mill was struggling, we would have been willing to make some concessions, but they are just making money hand over fist,” Booth said.

WestRock is expected to report its latest corporate earnings on April 27. The report will be for the quarter ending March 2018.

According to Zacks Investment Research, based on five analysts’ forecasts, the consensus earnings per share forecast for the quarter is 83 cents. The reported earnings per share for the same quarter last year was 54 cents.

The Covington mill produces bleached packaging papers for the tobacco and food industries.

Local 675 started negotiating with WestRock in September 2015. That was after Richmond-based MeadWestvaco Corp. and Georgia-based RockTenn Co. completed a $16 billion merger.

Local 675 is affiliated with the Association of Western Pulp and Paper Workers, which is based in Portland, Ore.

Rebecca Johnson, communications manager for the WestRock Covington mill, said the company is pleased with the new labor agreement.

“We are pleased we were able to reach an agreement. We are glad to be able to move forward so we can continue focusing on serving our customers and meeting the significant competitive challenges facing the mill and our industry,” Johnson said.

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