December 6, 2005 - Last Friday, the Company presented me with a letter outlining a demand for renewed bargaining sessions and an urgent need to get to a Final Offer immediately. The letter stated very simply that Boeing was requiring Chairman of the Board Michael Scholz to provide his personal guarantee for all financial risk at Avcorp, and also bring in a cash infusion of $2.5 million to pay off suppliers. Further, pressure was applied to get this deal done yesterday or risk moving the Company into bankruptcy.

Essentially, Michael Scholz has stated that the Board of Directors has refused to sign the guarantee for Boeing, and that he is likewise not prepared to assume this risk without a contract in place. If the guarantee is not signed and the $2.5 million not provided, then Boeing has stated they will put their work out to tender and Avcorp will lose the only profitable line of work they have. Cessna has placed similar conditions upon the Company, and have stated that in the absence of the guarantee and the $2.5 million they will dual-source products that are presently manufactured solely by our members. This will ultimately lead to bankruptcy. The letter from Paul Meringer outlines full details, and has been posted on the Union notice board.

The Union bargaining committee met with the Company all day Monday and Tuesday. Late Tuesday we finally reached a tentative agreement with Avcorp, subject to ratification by the Union membership. The contract offer deletes the Company’s proposals for increase of progression to one year for Learners and also deletes the Company proposal for a Sealer classification. Wages are adjusted as shown below.

We were hard-pressed on the issue of weekend shifts, and finally agreed that this would be non-voluntary for the first two years, with exemption for the top 60% in seniority. Thereafter it will be voluntary for all employees. At the end of the day on Tuesday, we knew that there would have to be a move in this area, and that the alternative is going on Strike against the Company. The Union Committee felt that going to the street on this issue at this time would be fatal to Avcorp. 

The offer is as outlined below:

• Sealers – Company proposals for new Sealer Classification deleted.
• Progression rates for learners  - no change; language as per the present contract.
• Weekend shifts – mandatory language in place for the first two years; thereafter weekend work becomes voluntary.
• Wages: 

   

o YEAR 1:  Bonus paid in shares or cash - $125 per year of service
o YEAR 2:  0%
o YEAR 3:  3%
o YEAR 4:  4%

Note: The cash/shares bonus in the first year may be cashed out on the basis of 50% cashed out in June 2006 and 50% cashed out in March 2007. Employees will have the option of retaining the common shares or a cash payout. The value of this is an effective 2.4% increase paid as a lump-sum.

The Union committee had pushed Avcorp as far as they could go, and no further movement could be made. This is the best contract we can bring back at this time, and based upon the Company’s letter, the consequence of not reaching agreement at this time would bankrupt the Company. With all of this in mind, the Union committee  recommended that the membership vote in favour of the proposed agreement. 
With this in mind members at Avcorp accepted their agreement the following Monday.

 

Stan Pickthall
Directing Business Representative
 
 

Union Serves 72 Hour Strike Notice at Avcorp