BNA - Guild News

Feb. 3, 2003

Guild Pay Proposal: Fair Increases for BNA’s Most Valuable Asset;
Guild Wins Retention of Sabbatical Program

The Guild offered a full compensation proposal on January 23, countered by BNA on January 30.

The Guild’s proposal (with year one pay scale shown below) calls for the pay scale to increase 4.5% in each year of the contract, with the band percentages unchanged year to year. The scale’s salary movement—separate from employee increases—keeps the scale competitive with the labor market and affords employees salary increases throughout their BNA career.

The Guild’s proposal spends 6.5% in new money over the current compensation cost, and an additional 6.5% in new money in each of the next two years. BNA has typically increased overall spending on unit compensation by 5% each year.

Find your grade and salary on the Guild’s year one pay scale, below; your annual increase will be the band’s percent of your annual salary:

In countering, BNA agreed with the Guild’s four band, 11 grade structure, but BNA increases the pay scale only once by a one time 3% increase to the minimum salary in Band A. BNA offers annual increases of only 4.5% in Band A, 3.5% in Band B, 2.5% in Band C, and a mere 1.5% for employees at or above Band D. BNA now agrees to tie annual increases to a percentage of each employee’s salary, rather than a grade midpoint. BNA’s initial proposal denied ANY pay increase to employees not getting an overall satisfactory performance evaluation. The Guild flatly rejected this proposal, noting that BNA must develop specific job standards for each job, and work with employees to meet these standards; if that fails BNA should initiate disciplinary action--not freeze pay. No one has pay frozen under the current system.

BNA proposed increasing total unit compensation by only 3.2% in year one, and even less in the next two
years -- 2.9% and 2.7% respectively. This is completely unacceptable -- employees have kept this company’s head well above water in a very turbulent economic environment and have earned strong pay
increases.

The Guild reminded BNA that agreement to a new system is contingent on agreement on annual scale
movement, appropriate funding, and annual increases for all unit members.

A Report on the State of the Company

CEO Paul Wojcik and VP A & F/ CFO, George Korphage addressed the bargaining committee last week with a State of the Company review, noting immediately that the parent company had a good year, with good operating profit.

The core business is healthy, Wojcik said. The number of employees was reduced by 2%, helping the bottom line. Health care cost -- especially retiree health care costs -- and pension costs are up. BNA’s data shows that major benefits costs (including massive increases in the cost of retiree health care) will increase as a percentage of revenue from 12.2% to 14.9% in 2003. BNA expects low or no growth in the next year or two.

In responding to BNA's State of the Company, the Guild noted that

• CEO Wojcik stated often to employees and shareholders that 2002 “was among our
  best ever”. Thus appropriate economic benefit must accrue to the very employees who kept
  BNA’s head above water.
  
• BNA employees over the past two difficult years have produced more with less -- 2%
  less workers, to be exact -- BNA saved salary, benefits, pension contributions, and other costs
  through this downsizing, but the work has not gone away -- the remaining workforce has seen
  increased workload over the past three years. Many employees don’t even claim overtime --
  rightly or wrongly -- another extra economic benefit for BNA.
  
• BNA’s employee compensation costs have remained consistent over the past 10
  years, through good times and bad. Employees -- who make BNA what it is -- are not the cause
  of economic difficulties for BNA.
  
• The Guild recognized costly -- but expected -- liabilities ahead -- notably pension funding
  and health care increases -- and Guild bargaining proposals for the next three years are
  predominately no-cost issues. In addition, the Guild has provided BNA with virtually all it has
  asked for in health care co-pay increases.
  |
• BNA’s employees must not be the source of further cost savings for BNA. BNA’s ability
  to produce a quality product is dependent on its employees--who have more than met the
  challenge to keep BNA bouyant through turbulent times.

In other news at the table:

Sabbaticals: BNA withdrew its proposal to eliminate the Sabbatical Program, and has withdrawn its community service proposal.

Non-Supervisory Seat on the Board of Directors: The Guild urged CEO Wojcik to creatively communicate BNA management’s support--or at least neutrality--on the Guild’s proposal (and the shareholder resolution) to include one non-supervisory seat on the Board. It is outrageous that the Board should recommend a “no” vote rather than remaining neutral, and it is only to the good of BNA and its employee owners to assure wide, inclusive participation by all segments of the Company. Nearly 100% of respondents to the Guild bargaining survey supported an employee seat on the Board.

Guild member on 401 (k) and Retirement Investment Committees: BNA has rejected placement of a Guild member on each of these Board Committees (currently the contract provides for a Guild member on the Administrative Committee of the Retirement Plan). In rejecting this no-cost proposal, BNA stated that employees (read: managers) are already on these committees and we are “not Enron” (the Guild noted that Enron wouldn’t have been Enron if it had provided for more employee participation and oversight). The Guild reiterated the importance--consistent with BNA’s corporate objectives--of assuring that employees have a voice on board committees, particularly on issues relating to their own retirement funds.

Bargaining resumes on Tuesday, Feb. 4 at 5:00 p.m.

-- Your Bargaining Committee

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