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A Suppliers Stance Volt on 3Ms Vendor Management System

It has been a long and fruitful affiliation, as Volt Workforce Solutions has been providing temporary workers to 3M for more than 20 years.


In 2001, Volt became 3M’s master supplier, providing manufacturing and administrative contingents in the United States. The vendor also fills accounting, call center, engineering, IT and scientific staffing positions across the country and in Europe.


So will 3M’s new vendor management system alter the Volt-3M relationship?


“The system will change,” says Rick Moore, Volt’s senior vice president.


But little else will, he added. Earlier, Volt used its own technology to manage the 3M account.


“But now we will still continue to manage 3M’s workflow,” More says. “Volt will just be using someone else’s tool and that’s fairly common within the industry.”


A VMS can work in a supplier’s favor. The tool can eliminate the need to wander the hallways and make constant contact with hiring managers.


IQNavigator’s Brian Owens agrees.


“The VMS dramatically enhances the ability for the supplier to be effective in terms of how efficiently he communicates with the client,” says Owens, whose company won the contract with 3M.


For example, suppliers know much more quickly when an opportunity is available. And if they submit a candidate against an opportunity, they know just as swiftly if the person has been accepted, declined or is in some sort of holding pattern based on further review.


Previously, the conglomerate assessed its master supplier quarterly, looking carefully at metrics like time to fill, turnover and attrition rates. In addition, Volt had service-level agreements and ongoing targets that it had to meet with the openings it filled.


One of the challenges of working with 3M is the diversity of its skill sets.


Volt has to provide a range of expertise in different industries from manufacturing to health care. The varieties of candidates notwithstanding, suppliers also have to contend with short lead times.


“Our industry as a whole suffers from the fact that our clients don’t often give us the lead times effective to finding the best talent,” Moore says. 3M is no different.


But what works in its favor is that 3M, like Volt, follows the Six Sigma methodology. 3M is supportive and lets Volt refine its program on an incremental basis.


For its part, Volt communicates with its supplier base in various ways, including e-mails and supplier forums. Quarterly reviews are also undertaken where staffing agencies can discuss their metrics and how they are performing.


Going forward, Volt anticipates little problem with the VMS implementation.


“We work with IQN on a lot of other accounts, so we are very familiar with their system,” Moore says.


3M’s Ebenhoch recommends that the executives whose units use the highest volume of contingents be brought on board upfront.


Once these supervisors understand the benefits of an organized and formal contingent workforce program, they spread the word.


Another suggestion is to involve the IT division early in the process, as most times they tend to be the greatest users of contingents. In addition, the IT unit can assist in designing the program and deal with other technical details.

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TOOL Navigating the Law Regarding Layoffs

Since the recession started in December 2007, more than 3.6 million jobs have been lost. No one can predict when the economy will turn around, and more employers will be forced to cut staffing. If they’re not careful, CCH says, they could face legal compliance issues. CCH, a provider of labor and employment law information and services and part of Wolters Kluwer Law & Business, offers information and tools that can help employers in understanding the laws regarding plant closings and large layoffs.

Click here to view the proprietary content, available free only through March 31, 2009.

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College Grads Face a Bleak Hiring Landscape This Year

Seniors graduating from college this year will get diplomas, but they may not get jobs.


Employers expect to hire 22 percent fewer new graduates from the college class of 2009 than they hired from the class of 2008, according to a new study by the National Association of Colleges and Employers.


The latest numbers also differ significantly from the fall, when employers’ hiring projections looked flat.


“Earlier, employers indicated that they expected to keep their new college graduate hiring levels even with last year,” Marilyn Mackes, the association’s executive director, said in a statement. “Our current survey shows that college hiring is as affected by the economy as other types of hiring.”


The drop in anticipated college hiring is part of an overall slack labor market, which has worsened rapidly amid the recession.


The expected decline in new-grad hires was prompted by the deteriorating economic situation, said the association, a professional group that forecasts trends in the job market.


“More than two-thirds of employers said the economic situation forced them to re-evaluate their college hiring plans, and nearly all of those said they have decreased their planned number of hires,” Mackes said.


The projected drop is likely to mean a sharp decline in employer activity on campuses this spring as well, with 66 percent of employers responding to the survey reporting plans to lower or eliminate spring hiring.


The latest association study also ends a string of positive hiring reports for new college graduates dating back to 2004. Students graduating in the early part of the millennium experienced major drops at the hands of the dot-com bust and the terrorist attacks of September 11, 2001. Hiring decreased 36 percent for the class of 2002 but steadied for the class of 2003 before rebounding in 2004.


Employers also seem cautious about the near future. More than 46 percent said they are unsure about their hiring plans for fall 2009, and 17 percent are already reporting that they expect to trim their college hiring further.


—Ed Frauenheim


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3M Looks to a VMS to Transform Its Temporary Workforce Program

The company is best known for its inventive products. Post-it and Scotch brands are just a couple of its prominent trademarks. However, 3M, the $24 billion St. Paul, Minnesota-based technology corporation, is involved in health care, display and graphics, and the industrial and transportation sectors.


3M relies on it 34,000 traditional employees and several thousands of temps to keep it ahead of its competition. But 3M’s workforce planning managers needed more detailed information on its contingent workforce. Technology provided the solution.


As a result, it is important that the company knows its contingent workers.


“We wanted greater visibility into our non-3M workforce,” says Tara Lemke Ebenhoch, the company’s workforce planning manager.


Besides, at different points in time senior executives wanted more details about the temp population than Ebenhoch and her group were able to provide.


The problem
The workforce planning squad, a part of 3M’s human resources group, took charge.


Its first step was to put together an HR-led team representing departments such as sourcing, finance and IT. This team supports the contingent workforce program, but its members do not report to workforce planning. They take questions from various quarters and provide answers.


The team began by interviewing 3M’s staff to identify their issues with contingent workers.


The information technology, manufacturing, engineering and marketing groups were surveyed using a Six Sigma methodology called Voice of Customer. In the process, the team learned that the departments being interviewed could not describe their temporary workers or what they were working on.


“Hiring managers also did not know who the qualified suppliers for various labor segments were,” Ebenhoch says.


To top it all off, there was no formal contingent spending approval process, which meant there was no consistency across groups. The company was using hundreds of staffing suppliers, many of which offered the same services.


As usually happens in decentralized operations, business unit managers were making their own hiring decisions based on limited information and focused on their own department’s immediate needs. Bill rates varied for the same skill sets.


The workforce planning team then researched how other companies, such as Johnson & Johnson and Medtronic, handled their contingent workforces. They also looked at Dun & Bradstreet for benchmarking intelligence.


The process helped them collect data on industry best practices and norms.


Finally, in 2007, the workforce planning team concluded that a vendor management system, or VMS, was what it needed to manage its contingent workforce, spending upwards of $200 million.


State of affairs
Currently in the United States, 3M has a preferred vendor on site for its manufacturing, administrative and clerical skills sets.


However, managers who require workers with different skill sets contact either the human resource management or sourcing team to identify a supplier (in 3M’s preferred relationship network) that can provide the appropriate temp.


At that point the manager is given the supplier’s contact information and initiates a relationship.


If there is no appropriate supplier, then the sourcing unit works to identify several of them, negotiate rates and draft contracts. But ultimately, it is the hiring manager who selects the supplier. HR only gets involved when there is a service issue with the supplier or a contingent worker.


As a result, the product company is besieged by thousands of suppliers. The expectation is that once the VMS is fully implemented (in early 2009) and a spotlight is on bill rates, suppliers will be trimmed, leaving the company with upwards of 300 vendors.


The solution
Traditionally, tools like a VMS enable corporations to save 5 to 20 percent on contingent acquisition and better manage their varied types of workers and locations.


In addition, such a system has all the benefits of a paperless process. Everything is automated, enabling managers and executives to quickly know their contingent workforce.


A business case was presented to executives, including the chief information officer, CFO and the HR vice president.


The team demonstrated how the VMS would help the consumer products giant stay compliant. It established that implementing a VMS would provide visibility into the workforce. Senior executives were taken in by the idea that all workers could be tracked by the system.


Surprisingly, cost savings was the lowest concern on 3M’s list.


In fact, internal stakeholders are skeptical about whether the VMS will yield any savings, but the workforce planning team is confident it will.


The team has yet to quantify the savings potential through its VMS of choice, IQNavigator, but reports that it should be 6 to 12 percent, depending on the skill set. Regardless of savings, the 3M management team bought into the idea of a VMS right away.


Course of action
The company was uncertain whether it wanted just a technology source or a model that decoupled the VMS from a managed service provider (MSP). One school of thought was to go with both an MSP and a VMS because of the momentum built around the business case coupled with executive buy-in and support from various in-house units.


But in June 2008, 3M decided to implement IQNavigator and manage the contingent workforce program in-house.


“We chose them because they offer a technology package that caters to a very diverse spend and varied service categories, which are what 3M has,” Ebenhoch says.


Another benefit was IQN’s large global footprint. 3M hopes that down the road all of its contingent workers worldwide will be administered by one tool.


The technology giant regards its contingents as a feeder pool for their employee population. 3M’s contingent worker objective is to get quality temporary workers at the right price.


Currently the conglomerate converts around 10 percent of its temp workforce to traditional employee status. But there are also those temps that fill specialized, strategic needs on a project basis and still others that supplement 3M’s workforce when required.


The company’s manufacturing units use the most temporary workers in the U.S., followed by IT, but 3M also has a large international presence. Internationally, units in China, India, Brazil and Italy are the top users of contingent workers.


“We hope to have a first deployment globally by the end of 2009,” Ebenhoch says. “We are looking at a variety of countries where we can take the tool.”


There will be a central contingent workforce office in the U.S. headed by the workforce planning team. But each country’s local resources and experts would help run the program, but not necessarily report back to the central office.


“3M is extremely decentralized in terms of its management philosophy,” Ebenhoch says. “So we would have the same platform that enables the analysis and compliance, with each unit abroad administering its program and maintaining a link with the central office.”


The tool
“We are going to give them the ability to view the suppliers they are using and the net average unit cost,” says Brian Owens, IQN’s senior vice president of industry solutions. IQN’s benchmarking and analytics will reveal the variance in rate structure for similar types of resources throughout the enterprise.


To keep suppliers and internal users abreast of impending changes, IQN has a formal change management process in place.


First, all the suppliers are notified of what’s going on with the program and then trained on the system. The same procedure is repeated with 3M’s internal stakeholders. Hiring managers can participate in training sessions with an instructor or do Web sessions.


The opportunity to take refresher courses is also available.


The first phase of implementation is occurring in the HR and IT departments.


As part of the implementation process, each business unit will be trained on using the VMS. Managers also will be educated on the suppliers that are qualified to provide required workers. In addition, they will learn about new controls in place to add or remove suppliers.


The workforce planning team is meeting managers to demonstrate the tool and talk through the process. In fact, hiring managers are even asked to participate in testing of the VMS to ensure direct involvement.


Further, the workforce planning team, which owns the program, is preparing companywide e-mails talking about VMS implementation timelines and what to get ready for. These e-mails are then sent by the executive sponsors of the contingent workforce program.


“It looks like the e-mail is coming from our two executive sponsors, and this obviously gets the right kind of visibility,” Ebenhoch says.


Once the program is under way, 3M’s objective is to evaluate its supplier base, and then use the VMS’ reporting ability to analyze its rate structure across all the skill sets it uses. Comparing market price intelligence is next.


“Ultimately it all comes down to whether 3M is competitive,” Owens says.


Strategic outlook
3M hopes the VMS will enable it to use its contingent labor force more deliberately.


Given its size and diversity of products, the company needs a wide range of temps. The contingent workforce program needs to be organized to accommodate the differences yet have a single unified process in view.


IQN is providing a single platform for all of the company’s non-employees. These include temporary workers, outsourced personnel or those who are part of a service contract, supplier representatives and even visitors who have unescorted badge access. The tool will track these groups.


Managers supervising temps not only track which contingent worker is on what task, but which suppliers are performing.


The plan is that IQN will complete its implementation in the first quarter of 2009. 3M anticipates the VMS will level the playing field for its suppliers in terms of price, expectations and process flow.


This in turn will enable suppliers to provide the right contingents at the right price when the company needs them.

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The Power of Community

Early in 2008, American soldiers training Afghan and Iraqi armies were having problems using a rocket-propelled grenade launcher. The equipment was old and had a tendency to jam, misfire and explode prematurely.

Frustrated, a unit commander posted a question to one of the U.S. Army’s communities of practice, which are online forums where soldiers ask questions and share ideas with peers around the world.

“Within a few days, someone who’d had a similar experience with the launcher posted a simple solution to the site on how to safely prevent misfiring,” says Mike Prevou, president and co-founder of Strategic Knowledge Solutions and senior knowledge management advisor to the Army in Leavenworth, Kansas.

The solution worked, and when the unit commander followed up to discuss his experiences, the issue became a hot topic in the community. The conversation thread was soon picked up by the Army’s safety commander, who issued a formal safety policy on how to deal with the rocket launcher’s safety issues that was sent out to all the units using this equipment. And it all took place within 15 days of the original post.

“Without the community, those soldiers may never have found a solution to their problem, and they probably would have just put the equipment away,” Prevou says.

Communities of practice aren’t just valuable for military personnel. They are becoming vital corporate tools that allow employees with similar jobs or interests to get advice and share best practices.

“Communities of practice are a super-fast way for users to produce and share content,” says Eric Suave, CEO and co-founder of Tomoye, a collaboration software vendor in Ottawa. Prevou uses Tomoye’s technology to build the Army’s communities. “It’s a more responsive way to share information when it’s needed that allows organizations to collect ideas for formal training.”

That capturing of knowledge is critical for organizations that need to tap into the expertise of a far-flung employee population, such as the Army. It’s also an important issue for organizations with aging employee populations who might soon retire, taking with them important but informal knowledge about processes, customers or corporate culture.

“Both groups can work in concert,” Suave says. “On one side you have fast dissemination of information; on the other you have long-term planning that can draw on what people are talking about and turn it into policies and core content.”

This combined value is why communities of practice are cropping up in organizations around the world. They link globally dispersed workers who can serve as mentors to each other and share knowledge in an informal setting.

“Most companies spend 80 percent of their training budgets on formal learning events, yet 80 percent of what people learn is on the job,” says Charles Coy, director of product marketing for Cornerstone On Demand, a talent management solutions company in Santa Monica, California.

Communities of practice can fill in that gap, connecting not only people in spread-out business units but also those who have similar titles but don’t get the opportunity to network as often as they’d like.

“They offer informal networking venues, while giving trainers a way to guide conversations, identify issues and capture knowledge,” Coy says.

A test drive at Subaru
Darryl Draper, national customer relations and loyalty training manager for Subaru in Cherry Hill, New Jersey, is writing her dissertation on the value of communities of practice as a learning tool. As part of her work, she launched a test program with Subaru dealers in her region. Half of the dealers completed an online self-paced course that featured no interaction with other students. The second group used identical content, but it was placed in a forum where course questions that included real-life customer scenarios could be discussed.

At the end of the training, dealers in both groups were asked about the information they had learned, and whether they thought about these skills in a different way. Then Draper tracked improvements in customer satisfaction surveys following the course. The course that included interaction and discussion came out on top.

“The data on the customer satisfaction surveys was statistically significant,” she says. “It showed that the community of practice worked.”

Draper is quick to point out that communities shouldn’t replace formal training. Rather, they should enhance training, Draper says. “Formal courses cover explicit knowledge with textbooks and facts, while the community covers implicit knowledge—that unspoken expertise that is the difference between novices and experts.”

Implicit knowledge is much harder to tap and track, because it’s unspoken. “Experts perfect their performance in ways they may not realize,” Draper says. “But through sharing and conversations, that knowledge comes out.”

How to make it work
Launching a successful community of practice, however, is not as simple as throwing a discussion forum on your network and assuming people will take advantage of it, says Coy. “It’s got to be integrated into what employees are already using the network for, and it’s got to be contextually relevant,” he says.

There are many tricks to creating environments that will attract people and will make them want to return for advice, conversation and knowledge-sharing.

Prevou says communities must be built out from the middle and networked out. “You have to find a midlevel leader or a core expert to drive the project and inspire people to use it,” he says.

It also needs to be nurtured and facilitated, Draper says. If there is a lull in the conversation, for example, she’ll ask provocative questions. If a question goes unanswered, she will privately e-mail key experts within the group asking them to respond.

“There has to be a champion who takes the lead for a community to be sustainable,” she says.

Prevou agrees. The Army currently runs 25 major communities of practice, and 90 minor ones, under four categories: leadership, functional, special forums and units. The major communities have dedicated facilitators who track and manage the day-to-day conversations, invite users to participate and market the communities through newsletters, e-mail alerts and formal user training.

To bring in new users, the Army posts its new-soldier material, such as rules and regulations, within the forums so new members have to learn how to use it as part of their training.

Prevou notes that this is not simply a tactic to get more users. Instead, he sees it as an effective way to get new people up to speed on what’s going on in the organization.

“When you are new in a company, you aren’t going to go to your boss and say, ‘Tell me about all of the issues you’ve dealt with in the last year,’ ” Prevou says. “But in the community you can see what people have been talking about. It’s like being able to listen in on everyone’s conversation for the last six months.”

Another way to engage users is to launch a community in conjunction with core training courses, suggests Coy. “That way you build a conversation around a specific topic and encourage users to share problems and network before and after the course,” he says.

Organizations also can make the community part of the course by posting questions at the site before class, or using it as a homework assignment, Prevou says. In one of his earliest communities, Prevou assigned students in an officer training course to ask their peers in Iraq and Afghanistan to share with the community the two biggest challenges they face, then to bring those responses back to class.

“It started us talking about what those soldiers should consider and generating ideas and solutions for them,” he says, noting his students brought those solutions back to their peers in the community. “It built a tremendous link between them and everyone benefited.”

Benefit is a key to keeping a community alive. “Communities have to be reciprocal. It’s got to be a place where if people put something out there, they know they will get something in return,” Prevou says. “When someone gets an answer to a question, it begins to build that trust.”

The communities have to be “sticky,” or created in such a way that users come often, and stay awhile, Suave says. “It’s got to be easy to use and designed for engagement.”

That sense of engagement can be built by sending e-mails when a new topic is posted, or when someone has received a response to their question. Engagement can be fostered by having multiple ways to respond and use content, such as simple one-click bookmarking, and easy posting of documents, images or videos.

Draper warns that a community shouldn’t be all business. “To instill a sense of community, you have to incorporate personal stuff into the conversation,” she says. For example, she posts photos of dealer events and anniversary parties to spur conversations and highlight key employees.

“All of this translates into community-building among peers who might otherwise never connect,” she says.

Draper discovered just how powerful that relationship-building was when she attended a community member’s Halloween event—a car-decorating party for customers.

“I got there and found people from competitive dealerships who’d come to support her,” Draper marvels. “That’s the power of communities. It exploded outside customer-service training to all parts of the dealership.”

There are pockets of excellence everywhere in organizations, Prevou says. “Communities of practice are a tool to tap into that excellence. It’s a way to share knowledge and build networks among people who might otherwise never connect.”

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What You Need to Know About Lawful Waivers of Age Discrimination Claims

In today’s difficult economic times, many employers are carefully assessing their operational structures, particularly the efficiency and expense of their workforce. When revenues are down and expenses remain the same or go up, something has to change. That something has typically has been a dramatic reduction in the workforce.


However, many employers are surprised to learn that layoffs can result in significant legal claims by affected employees. A reduction in force is a situation that often serves as the basis for discrimination claims—particularly involving age discrimination—even though the cause of the reductions may be a loss of business, a merger or a consolidation of business operations.


When terminating an employee because of a reduction in force, many employers offer severance packages to employees to obtain a waiver of claims. In short, as a part of the layoff, the employer offers an employee some benefit—typically compensation—that the employee otherwise is not entitled to receive. In exchange, the employee is asked to sign a release agreement that waives any claims against the company arising out of his or her employment.


Typically there are no specific requirements for such waivers of federal claims. But there is one major exception: claims for age discrimination under the Age Discrimination in Employment Act. To have a valid release of claims under the act, employers must comply with several technical requirements. Courts consistently have stated that these requirements are “strict and unqualified,” and if an employer fails to meet any of the statutory requirements, the waiver is “ineffective as a matter of law.” The technical requirements are:


1. A written and understandable agreement: The waiver must be part of a written agreement between the individual and the employer that is written in a manner calculated to be understood by the average individual eligible to participate.


    2. Reference to the Age Discrimination in Employment Act: The waiver specifically refers to rights or claims arising under the act.


3. Prohibition against releasing future rights or claims: The agreement reflects that the individual is not waiving rights or claims for actions that occur after the date the waiver is executed.


    4. Consideration required: The individual waives rights or claims only in exchange for consideration, in addition to anything of value to which the individual already is entitled.


    5. Attorney consultation: The individual is advised in writing to consult with an attorney prior to executing the agreement.


6. Consideration period: In instances of single-employee terminations, the individual must be given a period of at least 21 days within which to consider the agreement. In instances where a waiver is requested in connection with an exit incentive or other employment termination program offered to a group or class of employees, the individual must be given a period of at least 45 days within which to consider the agreement. In this case, “program” is defined to include voluntary and involuntary terminations affecting two or more employees.


7. Revocation period: The agreement provides that, for a period of at least seven days following the execution of such agreement, the individual may revoke the agreement and the agreement shall not become effective or enforceable until the renovation period has expired.

With respect to the specified time periods, employers should be aware that, if the waiver is sought as a part of a settlement for a claim of age discrimination that has been filed with a court or the Equal Opportunity Employment Commission, the employee is not entitled to either the 21-day consideration or the seven-day revocation period. Also, even when such time limits are applicable, an employee may sign a release prior to the end of the 21-day (or 45-day) time period, although the seven-day revocation period cannot be shortened by the parties.


Finally, there are some special rules that must be followed in order to secure a valid waiver. These come into play if the waiver is requested in connection with an “exit incentive” or “employment termination program.” A reduction in force would typically qualify as such a program. First, employees have 45 days to consider whether to sign the agreement. Second, employers must make disclosures concerning eligibility factors and time limits applicable to the program. The statute also requires the disclosure of the job titles and ages of all individuals eligible or selected for the program, as well as the ages of all individuals in the same job classification or organizational unit who are NOT eligible or selected for the program. The use of age bans broader than one year (such as “age 20-30”) does not satisfy this requirement.


Unfortunately, there are no clear guidelines on the precise nature and presentation of the informational requirements. The information that must be disclosed and the manner in which it must be disclosed are among the more disputed aspects of this area. Nevertheless, the regulations interpreting the ADEA provide some helpful guidance.

For instance, the scope of terms such as “class,” “unit,” “group,” “job classification” and “organizational unit” are determined by examining the “decisional unit” at issue.


The term “decisional unit” is not mentioned in the Age Discrimination in Employment Act, but is a term discussed by the regulations. The “decisional unit” is defined as that portion of the employer’s organizational structure from which the employer chose the persons who were offered consideration for the signing of a waiver, and those who would not be offered consideration. The term “decisional unit” was developed to reflect the process by which an employer chose certain employees for a program and ruled out others.


The decisional unit is important because it determines to whom the information must be given. The regulations provide examples to assist in determining the scope of a decisional unit, and specifically when a decisional unit is located somewhere other than the facility where the terminations occur. The regulations state that the particular circumstances of each termination program will determine the decisional unit.


Among examples cited in the regulations where the decisional unit is other than the entire facility are the following:

1. A number of small facilities with interrelated functions and employees in a specific geographic area may constitute a single decisional unit.

2. If a company utilizes personnel for a common function at more than one facility, the decisional unit for that unit (e.g., accounting) may be broader than the one facility.

3. A large facility with several distinct functions may constitute a number of decisional units. For example, if a single facility has distinct internal functions with no employee overlap (e.g., manufacturing, accounting, human resources), and the program is confined to a distinct function, a smaller decisional unit may be appropriate.

The regulations also state that if an employer in its disclosure combines information concerning both voluntary and involuntary terminations, the employer must present the information in a manner that distinguishes between voluntary and involuntary terminations. Finally, if the terminated individuals are selected from a subset of a decisional unit, the employer must still disclose information for the entire population of the decisional unit.


For example, if the employer decides that a 10 percent reduction in force of the accounting department will come from accountants whose performance is in the bottom third of the division, the employer must still disclose information for all employees in the accounting department—even for those who are rated the highest.

The reality is that a severance agreement can be an important tool to help employers reduce the risk of future claims by employees. However, to benefit from such an agreement, employers must be very conscious of satisfying the criteria required in each agreement.

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UAW Members Approve Concessions at Key Ford Plant

United Auto Workers members at a key Ford Motor Co. assembly plant have approved a new concessionary agreement by a wide margin, according to a posting Monday, March 2, on the Web site of UAW Local 900 in Wayne, Michigan.


The agreement was ratified at the suburban Detroit plant by 83 percent of voting production workers and 53 percent of skilled trades workers, the posting said. The local, representing about 3,500 workers, voted Sunday, March 1.


Top officials of Local 900 could not be reached for comment.


Ford’s axle plant in Sterling Heights, Michigan, was the first local to approve the contract Saturday. The margin of approval was 59 percent among the 2,200 workers at the suburban Detroit plant, represented by UAW Local 228.


About 42,000 UAW-represented workers at Ford’s U.S. operations have until March 9 to vote on the contract.


The new agreement calls on workers to give up lump-sum bonuses and cost-of-living raises over the next two years. It also limits overtime pay and supplemental unemployment benefits.


Ford also can use company equity instead of cash to fund half of the $13 billion the automaker owes for a UAW retiree health care trust. Skilled trades classifications will be cut from more than a dozen at some plants to only two: mechanical and electrical.


Filed by David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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Disability Award Upheld for Heart Attack Victim

An administrative assistant who had a heart attack at home after hearing her job would be terminated was entitled to accidental disability retirement benefits, the Massachusetts Supreme Court ruled.


Claire Cole, an employee of the city of Salem, Massachusetts, was at home on March 22, 2000, when she had the permanently disabling heart attack, according to a February 24 ruling in Retirement Board of Salem v. Contributory Retirement Appeal Board.


The heart attack occurred within one hour of experiencing emotional distress when a supervisor told her that her job would be cut.


Cole, who later died, did not return to work. Court records state that when Cole applied for benefits, “lengthy and tortuous administrative and judicial proceedings” ensued.


Eventually, in 2006, the Contributory Retirement Appeal Board ruled Cole’s heart attack was caused by stress due to hearing her position would be cut and that her communication with her supervisor about the termination occurred during the course of employment.


The Retirement Board of Salem appealed, arguing that Cole was ineligible because her injury did not occur during the performance of her work. But a trial court affirmed granting her benefits.


The Supreme Court upheld the trial court’s decision, finding that the benefits now belong to Cole’s estate because “benefits may permissibly be awarded only when a disabling injury is sustained during the performance of work duties and not merely as a result of being at work when injured.”


Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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Exxon Mobil Plans $4.6 Billion Pension Contribution

Exxon Mobil Corp. is expecting to contribute $4.6 billion to its worldwide pension plans in 2009, the company said Friday, February 27.


The Irving, Texas-based company will contribute $3 billion to its U.S. plans and $1.6 billion to non-U.S. plans, according to its annual report, filed Friday with the Securities and Exchange Commission.


Last year, Exxon Mobil contributed $52 million to its U.S. plans and $956 million to its non-U.S. plans.


Fair value of the oil company’s U.S. plans was $6.6 billion as of December 31, down 37 percent for the year. Non-U.S. plans’ fair asset value was $11.3 billion at the end of 2008, down 34 percent from a year earlier.


Exxon Mobil spokesman Chris Welberry said in a phone interview that pension assets were down in line with market movements in 2008. He emphasized that all the company’s pension plans are defined benefit, and are backed up by the financial strength of the company.


Filed by Jennifer Byrd of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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Individual Health Care Plans Crop Up for Small Employers

As the recession forces layoffs and benefit cutbacks at many employers, more individual health insurance plans are popping up—though the question remains as to whether people who need such coverage will be able to afford it.


Health insurers such as Aetna, Anthem Blue Cross and Blue Shield, and Cigna Corp. intend to release new individual plans in Ohio during the next year. Ohio is a top priority for Cigna because state laws make it easy for insurers to do business there, and Cigna already has 248,000 members in the state, says Andrew Sullivan, senior vice president of individual and small group business for Cigna.


Ohio also has had a large number of layoffs, and more small companies there are eliminating insurance coverage.


“Small companies are definitely being squeezed by the cost of health care, and more are dropping coverage altogether because they can’t afford it,” Sullivan says


Steve Millard, president and executive director of the Council of Smaller Enterprises small business advocacy group, says he expects that trend to continue in Northeast Ohio. Five years ago, about 58 percent of small employers across the country offered health insurance for their workers, but that number has fallen to 47 percent, he says.

To address their employees’ need for health care coverage, small companies are trying to find creative ways to help them get health insurance on their own—a move that could be an advantage to health insurers, Millard says.


For example, a handful of local companies have employees put their individual health insurance premiums on expense reports, and the company then reimburses them, Millard says. Others help employees pay for individual insurance premiums by putting money into a health reimbursement account, he says.


Such trends could be fueling an increase in the individual plan market for some insurers.


Medical Mutual of Ohio saw a 300 percent increase in the number of applications for individual plans at the end of 2008 compared with the same period a year earlier, says George Stadtlander, vice president of individual small group and chief underwriter at Medical Mutual.


“As we progressed through 2008 and as the economy continued to deteriorate and employment eroded, we have seen an increase in the volume of applications coming in,” he says.


Kaiser Permanente also has seen increased demand for individual plans, though that doesn’t mean more people are getting health care coverage, says Carolyn Abraham, director of Medicare and direct consumer sales for Ohio for Kaiser Permanente.


“The reality is, many people cannot afford the options or, the one they can afford, they can’t pass the medical screen,” she says.


Less-expensive individual plans often are designed for healthy people who don’t expect to need much health care. Therefore, those people must pass a medical screening to qualify for that plan.


Insurers are trying to make the premiums for such plans more affordable by increasing deductibles. On March 1, Anthem launched its Smart Sense plan, which will offer lower premiums but will have deductibles for individuals ranging from $500 to $10,000 and deductibles of $1,000 to $20,000 for families, says Josh Byrd, Ohio sales manager for individual sales for Anthem.


But no matter what companies do, individual health insurance plans won’t be the answer for the uninsured, says J.B. Silvers, a professor of health systems management at Case Western Reserve University’s Weatherhead School of Management.


“There is no way private insurance companies with individual policies will ever be able to close the gap” between the insured and uninsured, he says. “They don’t have a product cheap enough for people to afford it.”