I’m told that January saw a lot of pushback from the various guild members and even board members angry over negotiated terms of the IATSE/AMPTP tentative contract in advance of what will be ratification votes this month. The result is that leaders of the individual guilds that comprise IATSE may have to ram through the pact. For instance, I’ve been told that, at the Special Membership Meeting on January 24th for the Motion Picture Editor’s Guild IATSE Local 700, Executive Director Ron Kutak stated that the union ultimately will rely on members’ votes, once cast, ” ‘represented’ as a sort of electoral college, instead of treated as a general election.” So if ratification had to rely on one member, one vote — it would fail.

I first disclosed the terms of the tentative IATSE/AMPTP pact over Thanksgiving weekend even before union leaders had bothered providing details to members. The most controversial rollback is still this: that, effective 07/31/2011, the Health Plan will change the standards for continuing eligibility from a change of 300 to 400 qualifying hours over a 6-month period. Even the union reps are admitting this will cause 7% to 15% of the various IATSE Guild members to lose their insurance. (And if these are the official figures, you can bet the numbers will be higher.)

It’s little wonder then that the individual guilds that make up IATSE are having trouble spinning this to members. Several “No 400 Hours” websites started up like http://www.400hours.com/ and these two on FaceBook here and here. And suddenly circulating among the membership are emails opposing the contract, like this one: “IATSE Members from many of the locals are banning together for the first time, as a collective, to fight the proposed AMPTP contract. Our mission is to reach out to as many of the 35,000 members under the Hollywood basic agreement and let them know what this contract means. The increase of 400 hours will cause over 3,500 members to lose their health insurance. The ‘New Media provision is the other main reason for a “NO!” vote. The terms weaken our Union’s Basic Agreement and open the door to major losses in every Local of hourly rates and working conditions. Remember, what you give away today, you are not likely to get back ever…. We want our members to VOTE NO! We are GROWING and we are MAD!”

Meanwhile, informational meetings held by the IATSE Guild leadership have been angry and nasty. To answer the disappointed and disgruntled members’ outcry, the Guild leaders have begun using their websites to post “Vote Yes” testimonials, like this one from the International Cinematographers Guild IATSE Local 600’s national executive board member John Toll: “400 hours? Lets face it. It sucks, but what are our options? Voting ‘no’? Even if all IATSE locals voted against ratification, then what?” I’ve already reported about fireworks inside the ICG meetings on the tentative deal’s rollbacks. Now, at the Special National Executive Board meeting held January 11th, the NEB voted to recommend that members cast ballots to ratify the new contract. But 39 voted “for”, and 18 voted “against”, with 1 abstention. “The sole purpose of this bullshit ‘special’ meeting was to get the NEB’s approval so that Local 600 can now start selling this piece-of-shit to its members,” one angry member emails me. “I can only hope individual Local 600 members show more courage and backbone than their elected representatives showed that day.”

There were just as many fireworks at the Special Membership Meeting on January 24th for the Motion Picture Editor’s Guild IATSE Local 700 at the DGA. Although held at 7:30 PM (which makes it difficult for the working members to attend due to an editor’s 12-hour day, thus ensuring a smaller and more controllable crowd), there still were plenty of members there. “Well, if we were expecting sympathy or even clarity from the leaders of our local, we got little,” one attendee emails me.

“We members were far less interested in the numbers crunching than what will be the human cost. Ron Kutak, Executive Director, and the Guild president, Lisa Churgin, would not address that [400 hours] issue at all and got very defensive, even rude, to the members when asked questions related to that. Many of the Editor’s Guild members said that they were willing to sacrifice some of the pay increase to maintain their health insurance as is, with no rollbacks. Ron was adamant that was not possible and gave no explanation as to why. We are not asking to re-negotiate our share of the pie with the AMPTP, we just want our union to divide our share so that we don’t lose our medical benefits as they stand now. As we all know once you give in and lose medical benefits, we will never get them back.

“And Ron stated that our votes, once cast, will be ‘represented’ as a sort of electoral college, instead of treated as a general election, which is what the membership has always been led to believe.” Indeed, each local has “votes” based on the number of convention delegates they are allowed, one for every 100 members. Whatever way the majority of members in any local votes, so go all their delegate votes on the contract. And even if all the locals vote “no”, the president of IA can force the contract on members.

The problem is that, because of the way that IATSE is configured, each of the locals affected by this contract know little about where the other locals stand on this. But now the disaffected members are starting to communicate with one another, and even meeting together independent of their leadership. They’re united in their anger that none of their leaders even discussed the 400-hours rollback with them while its terms were being negotiated. Instead, they were prsented with a fait accompli. “It is not that the Editor’s Guild doesn’t expect to make sacrifices in our current economic client. It is that the studios are trying to break us,” one angry Local 700 member emails me. “We get no respect, are expected to work through meals, stay past our 12 hours, not put in for turnaround or overtime. This was the same union that gave up the right to have an assistant editor with every editor on a show. Now editors commonly do the work of two. We can’t even get the equipment or staff we need to do our jobs. Or we will never work for that studio again if we ask! Yes, blacklisting still exists today if you stand up for your rights. I thought that was the job of a union.”

Attempting damage control, Ron Kutak sent his Editor’s Guild members on January 19th two emails — see below — explaining how the Health Plan is funded, and why IATSE made the deal it did regarding the 400 hours rollback. (It’s very similar to this December 4th email I reported that ICG Local 600 members received from national president Steven Poster.) But as an angry member emails me: “Note the fuzzy math. In the past, we were asked to take minimal wage increases to keep the Health and Pension plans funded. (Ron alludes to this.) So we were taking net pay cuts (when inflation is factored in) during the flush times to head off just the problem the funds are facing now. Note also how Ron points to the 3% wage increase as a coup when in fact AFTRA, DGA and WGA all received equal if not greater wage increases.”

I’ve excerpted what Kurak said in his emails to members about the Health Plan below:

From: Ron Kutak
Date: January 19, 2009, 8:01:47 PM PST
Subject: Part 1 – Basic Agreement Summary


We faced a $587 million shortfall projected over the three years of the new agreement.

$200 million will be contributed by the producers into the Health Plan based on the reserve levels during the life of the contract.

The reserves in the active Health Plan will be spent down from 12.5 months to 6 months.  The retiree reserves will be spent down from 16 months to 8 months, contributing $189 million towards the shortfall.

Some benefits needed to be changed, including a participant out of network co-insurance increase from 30% to 50%, introduction of mandatory mail order drugs for maintenance medication, increasing co-pays on doctor visits to $30.00 for those in the MPTF area not using MPTF services, introduction of a $5.00 co-pay on MPTF services, and in the final year of the agreement, beginning August 1, 2011, an increase in the eligibility requirement from 300 to 400 hours.

The bank of hours is preserved at 450.

Part 2 – Background and Explanation

This entire negotiation was really about two things:  first and foremost, our Health Plan, and secondly, securing the jurisdiction over new media work in the same way the DGA, WGA, and AFTRA did.

Our Health Plan is in severe trouble due to the so far unabated rise in costs.  Over the last three years, costs to the Plan have increased an average of 9.67% compounded each year.  While this was happening, residuals and hourly contributions, two direct funding mechanisms, were essentially flat.

The residuals income is always used to first fund the Pension Plan, and whatever is left is then given to the Health Plan.  Due to the Pension Protection Act, recently passed by Congress, the rules surrounding pension plan funding have changed.  One aspect of these changes requires us to count all participants who have had contributions made on their behalf counted as if they will receive a pension when they ultimately retire.  This is different than it used to be for us, as we only had to count vested participants (five or more qualified years) prior to the enactment of the new law.  This means that our minimum funding requirement has increased, and there is even less from the residuals going into the Health Plan.

So, with hours and residuals essentially remaining flat, and a projected 9% compounded increase in health costs going forward, we have a projected $587 million shortfall to the Plans over the next three years.  When the negotiations started, the producers claimed we had a $780 million shortfall.  Why the difference?

Due to an extremely poor investment climate, the producers claimed an additional $200 million was necessary to make up for the 20% in losses the Pension Plan incurred for 2008.

We managed to nullify that claim.  Because the Pension Plan has different investment returns each year, we have an 8% projected return that we use each year to “smooth out” variations year to year.  Looking backward, we have made our 8% to date, and on a go forward basis our investment advisors, employed by the Finance Committee of the Plans, assure us over time we will continue to meet our 8% number.   Our Pension Plan, as I have written before, is secure, and our returns are in the top 1% of all Taft Hartley Plans for 3-, 5- and 10-year periods.

The producers have agreed to put an additional $200 million into the Health Plan over the course of the next three years by way of increased hourly contributions.

This, coupled with our wage increases, gave us a comparable money package to those recently obtained by the DGA, WGA and AFTRA.

This left us with $387 million still to “find.”  The reserves in the Health Plan, currently at 12.5 months in the active plan, and 16 months in the retiree plan, will be spent down to 6 and 8 months, respectively.  This will provide $189 million toward the $387 million.  (1 month of reserves equals the amount the Plan would spend providing coverage if all contributions ceased.)

The rest needed to come from Plan modifications.  (The main ones outlined in my previous email.)

No one likes this.  For us to keep the Health Plan intact, we did what we could to minimize the effect on all the members.  This is not a “give back” to the producers, but a deal crafted in the face of rising costs in a terrible economic environment, based on what the consultants and actuaries, employed by both labor and management, as well as the Plans’ administrators, told the bargaining parties they needed.

The economics of the negotiation was all about the Health Plan.  We needed, in a sense, this $587 million before we started, while still retaining a 3% wage increase per year.  With inflation abating for the moment (the government number is .1% for 2008), we negotiated this 3% a year to make up for the years in other agreements where we had a $.50 or $.75 increase, when at that time, all the other money also went into the Health Plan.

Members have asked if an increase was necessary in the third year from 300 to 400 qualifying hours, why didn’t we increase the bank of hours?  This would have increased costs, not decreased them.  Raising the bank to 600 hours would have increased our shortfall by an additional $150 million.  Remember, in 2000, the bank was increased from 300 to 450.  Likewise, a two-tiered plan, if this were instituted, would result in a higher number of qualifying hours to qualify for the Plan we have.

Hopefully, the badly broken health care system in this country can be fixed, but in the meantime, every available dollar we can find has to go into our own health care.

It is still free to individuals and families, requiring work approximately 30% of the year.

As a Trustee and Co-chair of the Finance Committee of the Plans, I struggle with the economics of the Plans on an ongoing basis and assure you we are doing everything we can on all fronts.

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