millions of dollars, the retention plan was unpopular. "It's just outrageous," said Wayne Bentz, head steward of Steelworkers Local 329.
Fresh from a May federal ruling that 3,000 Steelworkers were illegally locked out of Kaiser plants during the 1999-2000 labor dispute, union leaders scoffed at the notion of awarding extras to executives who stay.
"Kaiser's management illegally locked out its union-represented workers for 20 months, curtailed its aluminum-making operations to sell public power at windfall profits, and allegedly impeded the federal investigation of an explosion at its Louisiana alumina refinery," said David Foster, the Steelworker's District 11 director. "This type of conduct is clearly not the type that should be rewarded."
Kaiser sees it differently.
The company has appealed the administrative law judge's ruling that it illegally locked out Steelworkers. Should the ruling be upheld, Kaiser may have to pay about $180 million in back wages and other costs.
And despite accusations that Kaiser wrongly profited and then kept $485 million from the resale of federal electricity during last year's power crunch, the company has maintained it carefully followed the terms of its electricity contract with the Bonneville Power Administration.
Furthermore, Kaiser disputes allegations that it engaged in any wrongdoing regarding the explosion of its alumina refinery in Gramercy, La.
Kaiser spokesman Scott Lamb said the retention plan was assembled by Mercer Human Resource Consulting, which based the findings on industry averages.
Lawyers for Kaiser wrote that the plan was within the range of other retention programs adopted by companies with similar Chapter 11 issues. Without it, competitors may seek to recruit Kaiser employees.
Within the parachute package, which Kaiser calls a change-in-control plan, four top executives would receive a payment equal to triple their annual salary. The employees include CEO Hockema; senior vice president and chief administrative officer John Barneson; executive vice president Harvey Perry; and general counsel Edward Houff. The rest of the employees in this plan would get an amount equal to twice their salary. All would receive other incentives and benefits.
The retention plan also includes a $9.8 million supplemental retirement program for 25 employees, and a $14.9 million severance program for 62 employees should they be fired.
Under this severance provision, the executives would get twice their salary. About 58 other employees would be paid half or full salary, along with benefits.
A creditors' committee made up of asbestos claimants asked that the hearing date be pushed back to allow further scrutiny of the plan, according to court papers.
Dan Sampson, financial secretary of Steelworkers Local 338 at the Trentwood rolling mill, said the plan is upsetting to Kaiser's rank and file.
There are about 600 managers, Steelworkers and support staff on the active payroll at Trentwood.
At the Mead smelter, more than 700 union members and many managers have been laid off during an 18-month curtailment.
Foster said such retention plans embody the sort of corporate greed that has led to massive accounting scandals and destroyed investor confidence.
"By filing this motion, Kaiser has chosen to ignore the reality of the crisis of public and investor confidence that is gripping the country," the Steelworkers said in its motion against the retention plan. "Kaiser's executives instead seek to join a bandwagon of excessive salaries, benefits and perks."
The union is among the major creditors Kaiser must negotiate with if it has any hopes of emerging from bankruptcy.
Kaiser has until December to file its broad restructuring plan.
•Business writer John Stucke can be reached at (509) 459-5419, or by e-mail at johnst@spokesman.com.
