Rural Workers Feel ‘Squeeze’ Over Managed Care Benefits

The New York Times today profiles a rural Pennsylvania clothes hanger factory, where until recently workers were able to "still enjoy traditional indemnity health insurance." To keep those benefits in the face of managed care, the workers are now risking layoffs. Tyco International acquired the plant four years ago and turned to managed care to "rein in" labor costs as part of an overall strategy to whip "creaky, old-economy manufacturing companies into shape for the global era." Tyco says that the plant could save $500,000 a year by turning to managed care, but plant workers are resistant to the idea. "The reason people came here was the benefits were good. The work was bad. The money wasn't good. But we have a good health insurance plan. And now, that's what they want to take away," Jody Geist, a 13-year plant employee, said. With "scarce" network doctors in the "remote hills and hollows," of central Pennsylvania, many employees are concerned that managed care will make it more difficult to receive affordable health care at all. Last May, Tyco began negotiations with the Philadelphia union that represents the plant's workers to replace a contract set to expire in December. Dianne Mourner, a 28-year employee who was on the negotiating committee, said the negotiation "wasn't a negotiation at all" and that Tyco officials said from the beginning, "If it doesn't go the Tyco way, we're shutting down." In a "final offer" to workers, Tyco provided a managed care insurance plan and raises of 60 cents per hour for the first year and 25 cents per hour for the second two years of a three-year contract. Workers are permitted to retain their old health insurance, but by doing so they would lose all but three cents of the pay increase. Tyco said that should the offer be rejected, mass layoffs would begin this week. Tyco spokesperson Judith Czelusniak said that "keeping labor costs down was a fitting way to save the company's hanger-manufacturing jobs in the United States," as the "American garment industry has been moving offshore." Last week, the workers rejected the offer at both a first vote and a second mandated by Tyco. The Times reports that workers are now "waiting for their layoff slips" (Walsh, New York Times, 10/25).