GKN Proposed Contract Delivered January 16, 2009

Electronic Summary of Changes GKN has in the final offer given to the Bargaining Committee on January 16, 2009. Print version is being delivered and will be passed out in the shop soon. Note: the electronic copy is for reference only and the formatting was lost in the translation to a web page. If any discrepancies appear between this electronic version and the printed version, you should use the printed version as the official transcript.

~~Strikethroughs~~ is language removed and Bold, Underlined, and/or Large font are new language additions.

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ARTICLE 5 – WAGES

Section 9 Cost-of-Living Allowance

A. In order to protect the buying power of an hour’s work of its employees against changes in consumers’ prices, the Company agrees to a Cost-of-Living Allowance which shall be adjusted, as set forth in Subsection C of this Section, for changes in the cost of living during the life of this Agreement.

B. Eligibility for the Cost-of-Living Allowance (COLA) is extended to employees in the Bargaining Unit

C. The basis for determining Cost-of-Living Allowance adjustments will be as follows:

The Cost-of-Living Allowance (COLA) will be determined in accordance with changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) (United States City Average, All Items, 1982-84 = 100), published monthly by the Bureau of Labor Statistics (BLS), United States Department of Labor, and hereinafter referred to as the “BLS Consumer Price Index”.

D. The amount of the cost-of living allowance shall be as set forth in this subsection. The company agrees to prepay COLA in the amount of $0.34 cents on Jan 9th, 2006 January 12^th 2009, an additional $0.34 cents on Jan 8, 2007 January 4^th 2010, and an additional $0.34 cents on Jan 7th, 2008 January 3^rd 2011. If the COLA calculation generates more than $0.34 cents per year, according to the process specified below, additional COLA will be added to the wages at the appropriate quarterly milestone.

Price Adjustment for: Effective Date of Adjustment
Based on full .075% Change in Three (3) month Average CPI-W Index

Price Adjustment for: Effective Date of Adjustment Based on full .075% Change in Three (3) month Average CPI-W Index

Price Adjustment for:	Effective Date of Adjustment	Based on full .075% Change in Three (3) month Average CPI-W Index

First 26 January 2009 Oct., Nov., and Dec. 2008

Second 27 April 2009 Jan., Feb., and March 2009

Third 27 July 2009 April, May and June 2009

Fourth 26 October 2009 July, August, and Sept 2009

Fifth 25 January 2010 Oct., Nov., and Dec. 2009

Sixth 26 April 2010 Jan., Feb., and March 2009

Seventh 26 July 2010 April, May and June 2010

Eighth 25 October 2010 July, Aug., and Sept. 2010

Ninth 24 January 2011 Oct., Nov., and Dec. 2010

Tenth 25 April 2011 Jan., Feb., and March 2011

Eleventh 25 July 2011 April, May and June 2011

Twelfth 24 October 2011 July, Aug., and Sept. 2011

E. The amount of the COLA which shall be effective for any three month period as provided above shall be based on the percent of increase between the average for the prior calendar quarter and the Peg Point (~~192.7~~ (215.5) or less = $.00) with one-cent ($.01) adjustment for each full 0.075% change in the average BLS Consumer Price Index for the appropriate three (3) month period indicated. In no event will a decline in the average of a quarterly period of the BLS Consumer Price Index cause a reduction in the Pure Base Rate. Retroactive Payments will be made as soon as practicable after agreement is reached.

F. Employees hired or rehired without seniority subsequent to a Cost-of-Living Adjustment date will be entitled to only those additional Cost-of-Living amounts, which become effective subsequent to their date of hire.

G. Employees recalled from layoff status will return at their last Pure Base Rate in the classification plus the same COLA additive they had at the time of layoff; if COLA has been folded in during their layoff status, their last held COLA additive will be folded into their Pure Base Rate upon their return to active status. An employee rehired/recalled with seniority will receive the same COLA at the time of rehire/recall which would have applied to an employee with the same seniority date who remained active.

H. The amount of any Cost-of-Living Allowance shall be included in computing overtime pay, vacation pay, holiday pay, call-in pay, jury duty/witness duty pay, funeral pay, sick pay, military leave pay, and shift premium.

I. No adjustments, retroactive or otherwise, shall be made due to any revision, which may later be made in the published figures of the BLS Consumer Price Index for any base month.

J. The parties to this Agreement agree that the continuance of the Cost-of-Living Allowance is dependent upon the availability of the official monthly BLS Consumer Price Index in its present form and calculated on the same basis as the BLS Consumer Price Index for September 2005.

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ARTICLE 5 - WAGES

Section 4

A. If an employee is assigned work in a job classification rated lower than his rate, he shall retain the higher rate.

B. The above rule may be waived in lieu of layoff by mutual agreement in writing between the ~~employee~~ Union and the Company.

C. Employees shall not be assigned work in another classification for a period in excess of two (2) consecutive weeks if people are on layoff in that classification. In special circumstances, this period may be extended ~~upon agreement with the Union~~ by mutual agreement in writing between the Union and the Company.

D. It is agreed that a Bargaining Unit employee will not be laid off from a classification as a direct result of being assisted.

E. In the event the Company decides to return work in-house from any outside vendor that was previously performed by IAM CBU this work will be reclassified and added to Schedule A of this Agreement.

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Article 6- REGULAR HOURS OF LABOR

Section 6

Back to original (2006 Contact) language

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2009 = 11 days

Memorial Day Monday 25 May 2009

Independence Day Friday 03 July 2009

Labor Day Monday 07 September 2009

Thanksgiving Day Thursday 26 November 2009

Thanksgiving Day Friday 27 November 2009

Christmas Shutdown Thursday 24 December 2009

Friday 25 December 2009

Monday 28 December 2006

Tuesday 29 December 2009

Wednesday 30 December 2009

Thursday 31 December 2009

2010 = 13 days

New Year’s Day Friday 01 January 2010

Martin Luther King, Jr. Monday 18 January 2010

Memorial Day Monday 31 May 2010

Independence Day Monday 05 July 2010

Labor Day Monday 06 September 2010

Thanksgiving Day Thursday 25 November 2010

Thanksgiving Day Friday 26 November 2010

Christmas Shutdown Friday 24 December 2010

Monday 27 December 2010

Tuesday 28 December 2010

Wednesday 29 December 2010

Thursday 30 December 2010

Friday 31 December 2010

2011 = 13 days

New Year’s Day Monday 03 January 2011

Martin Luther King, Jr. Monday 17 January 2011

Memorial Day Monday 30 May 2011

Independence Day Monday 04 July 2011

Independence Day Tuesday 05 July 2011

Labor Day Monday 05 September 2011

Thanksgiving Day Thursday 24 November 2011

Thanksgiving Day Friday 25 November 2011

Christmas Shutdown Monday 26 December 2011

Tuesday 27 December 2011

Wednesday 28 December 2011

Thursday 29 December 2011

Friday 30 December 2011

2012 = 2 days

New Year’s Day Monday 02 January 2012

Martin Luther King, Jr. Monday 16 January 2012

New Holiday Language

The company will not require mandatory overtime on the above named holidays and will make every sincere effort to avoid working the remaining holidays. The Company will only work any of these holidays in a severe critical emergency affecting a customer. Staffing will be accomplished first by volunteers and the company will discuss the matter with the Union before working the holiday.

MLK Day Holiday beginning 2010

Employees will be allowing to utilize an “O” day, vacation day, or sick day in observation on MLK holiday in 2009.

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ARTICLE 6 - REGULAR HOURS OF LABOR

Section 4

An unpaid lunch period of thirty (30) minutes will be granted to employees working more than four (4) hours overtime during any one shift. Additionally, employees will be granted a ten (10) minute break between the employee’s regular shift and pre and/or post shift overtime of two (2) or more hours.

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ARTICLE 6 - REGULAR HOURS OF LABOR

Section 4

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ARTICLE 12 - SENIORITY

Section 3

Layoff

A. In case of a layoff within a job classification, the sequence of layoffs in the job classification shall be: first, employees transferred in lieu of layoff within the preceding ~~thirty~~ ~~(30)~~ sixty (60) working days; second, by seniority in the job classification as defined in Section 2A above.

B. An employee due to be laid off may apply at the Human Resources Department for a transfer and senior qualified applicants will be given first consideration for available openings.

C. An employee who is transferred in lieu of layoff may accept the layoff from his previous classification, instead of the transfer; any time before he has worked thirty (30) days after the transfer has been made.

D. In case of unsatisfactory performance by an employee transferred in lieu of layoff, the Company reserves the right to cancel the transfer and layoff the employee from his previous job classification within a period of thirty (30) days actually worked from the date of the transfer.

ARTICLE 12 – SENIORITY

Section 4

All new employees will be considered on probation for a period of forty (40) working days from the date of initial employment ~~in the bargaining unit~~.

ARTICLE 12 – SENIORITY

Section 7

Laid off employees shall be called back to work in accordance with their seniority. The Company shall notify them in writing, by mail forwarded to the employee’s last known address on the Company’s records, and the employee will be required to notify the Company within four (4) working days that he will report back to work within twenty-one (21) days of the receipt of this notice (excluding employees on temporary layoff status). Failure to do so will result in automatic loss of seniority and the Company will be relieved of any obligation to reinstate the employee. It is the sole responsibility of the employee to keep the Personnel Department of the Company properly informed as to his address and telephone number.

ARTICLE 12 – SENIORITY

Section 8

Any employee laid off for a continuous period of ~~thirty-six~~ ~~(36)~~ forty-eight (48) months shall be dropped from the Seniority List.

ARTICLE 12 - SENIORITY

Section 14

Employees are expected to provide On-the-job-training as part of their regular duties. However when four (4) hours one (3) hour or more of classroom style instruction is requested by management and performed by an employee in the aggregate in any workday, the employee will be paid at the leadman rate for such classroom training. Upon completion of the training the employee will return back to his normal rate of pay.

ARTICLE 12 - SENIORITY

Section 17

A. Temporary layoffs shall not exceed ten (10) consecutive days in any one (1) year period.. Such layoffs shall be deemed necessary for the following reasons only: an act of God, cancellation of contract by the customer without prior notice, significant supplier issues causing material availability problems, or moving of a department. The Union shall be notified in writing of just cause of any reasons stated above. Seniority as defined in Article 12, Sections 2A and 3 shall not apply providing that the temporary layoff shall affect the entire department.

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ARTICLE 13 - VACATIONS

Section 3 (Unused carry over vacations will be paid at the end of the expiration of six months after the new vacation year anniversary date.)

All vacations must be taken before the expiration of twelve (12) months after date vacation is earned. However, up to ~~five (5)~~ ten (10) vacation days may be carried over into the succeeding vacation year. Those vacation days carried over must be taken before the expiration of six (6) ~~twelve (12)~~ months after the new vacation year anniversary date. Any unused carry over vacation days will be paid out ~~at the vacation earn date~~.6 months from carryover date.

ARTICLE 13 - VACATIONS

Section 6

Vacation pay will not be allowed in lieu of an actual vacation, nor will accumulated vacation or vacation pay be allowed on a pro rata basis except that (a) accumulated vacation and vacation pay, on a daily pro rata basis including the last full day worked, will be allowed to employees with twelve (12) months or more continuous employment who are terminated for any reason and (b) accumulated vacation and vacation pay, on a daily pro rata basis including the last full day worked will be allowed to all employees other than probationary employees, as defined in Article 12 hereof, who leave the Company to and actually do serve in the armed forces of the United States, provided they furnish satisfactory proof of their military service within a period of forty (40) days after leaving the Company (except as noted in Section 3 above).

ARTICLE 13 - VACATIONS

Section 7

Should an employee leave the Company for any reason whatsoever and be re-employed, vacation allowances shall start from the date of ~~reemployment~~ re-employment.

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ARTICLE 22 – FUNERAL LEAVE

Funeral leave will be granted per the schedule below:

Relationship to Employee:	Paid Bereavement Days
Spouse, Child, Stepchild, Stillborn(a)	5 Days
Parent, Stepparent, Documented Legal Guardian	4 Days
Brother, Sister, Stepbrother, Stepsister, Half-Brother, Half-Sister, Father-In-Law, Mother-In-Law, Son-In-Law, Daughter-In-Law, Brother-In-Law, Sister-In-Law, Grandparent, Great Grandparent, Grandchild,	3 Days

Such pay shall be 8 hours working rate including shift differential. Funeral leave pay may be allowed from the day of death up to 10 calendar days after the funeral or the memorial service not to exceed the schedule above, provided that the employee attends the funeral or memorial service, but no funeral leave pay shall be allowed for any funeral leave day for which holiday, vacation, sick leave, weekly disability or similar payment is paid. All days taken after the date of the funeral or memorial service must be taken consecutively. Written proof satisfactory to the company (such as a death notice confirmation from a corner, undertaker, doctor or hospital) must be submitted by the employee to his Team Leader or designee no later than five (5) working days after return to work.

(a) In addition, an employee will be granted funeral leave for a stillborn child if the employee provides a certificate of fetal death which has been certified by the attending physician.

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ARTICLE 24 - SICK LEAVE

Section 4

Sick leave days are considered to be only those days falling within the employee’s regular schedule of hours or during mandatory overtime.

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Healthcare Improvements

HEALTH CARE/DENTAL/VISION

Year 1 = 12% Monthly Max Contribution Rate

Year 2 = 12% Monthly Max Contribution Rate

Year 3 = 12% Monthly Max Contribution Rate

Improvements in the EPO Plan Only:

Eyeglass Frames – One every year allowance of $140.00 retail. Employee pays 50% after that (previously was 100%).

Elective Contact Lenses – Up from $105.00 to $150.00 reimbursement.

Dental – Type III – Major – Increase to 70% (previously was 50%).

Maximum Benefits – Increase to $2,000.00 (previously was $1,500.00).

Orthodontics – Increase lifetime maximum from 50% up to $2,500.00 (previously was $2,000.00).

Hearing Aid Coverage – Increase the hearing aid coverage to $1,000 every two years (previously was $500.00).

Current PPO Plans – No changes to coverage.

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ARTICLE 28 – SUBCONTRACTING

OFFSET AND SUBCONTRACTING ARRANGEMENTS

Section 1

The Company and Union agree that an increasingly productive workforce is critical to the continued success of the enterprise and that domestic and international sales represent opportunities for employment growth and stability. The parties also recognize that a variety of business factors, including the Company’s ability to secure sales, may require offsets as part of such transactions. While the parties acknowledge agreeing that the Company has the right to enter into offset arrangements, the parties agree that the Company and the Union will meet periodically to discuss the status of offset arrangements.

Given these conditions, and in acknowledgment of Company and Union concerns regarding employment stability, the parties agree to meet periodically to discuss the impact of subcontracting on bargaining unit jobs.

With respect to the subcontracting of work currently performed by bargaining unit employees, the parties recognize that from time to time such subcontracting may be necessary. To enable the Union to suggest competitive alternatives which might allow the retention of work within the bargaining unit, the Company will, at least sixty (60) days prior to signing any agreement to subcontract work currently being performed by bargaining unit employees, provide notice to the Union of its plans to subcontract work which would directly result in the displacement of bargaining unit positions. The Company will provide information related to the potential subcontracting other than information it considers to be confidential, proprietary or subject to nondisclosure provisions.

The parties recognize that some subcontracting decisions cannot be disclosed within the sixty (60) day period referred to above, due to confidentiality concerns. In such circumstances, the Company will provide the Union as much notice as practicable.

Following notice of specific plans to subcontract work currently performed by bargaining unit employees, the parties shall, upon the request of the Union, meet and discuss the impact on the bargaining unit. The Company agrees to consider any proposal the Union might make which would result in a materially less costly way to retain such work in the bargaining unit.

The Company will provide the Union with the pertinent information used by the Company to assess the relative costs of subcontracting, offloading, or performing the work in the bargaining unit, and the reasons for the proposed subcontract or offload. The Union will keep confidential, and not disclose, any information provided pursuant to this information which the Company designates as not subject to disclosure.

The Union must present any such proposals within 30 calendar days of receipt of the Company’s plans. The parties will meet periodically to review the implementation of any such union proposals accepted by the Company. Should the Union’s projected savings not be realized within any ninety (90) day review period during implementation, the Company will have the right to subcontract the work.

Section 2

Employment Stability Income Continuation Plan: In the event the Company subcontracts work resulting in the termination of employment of active bargaining unit members, affected eligible employees shall receive severance payments equal to one week’s pay (which shall be defined as Base Rate plus COLA) for each complete year of Company service up to a maximum of 26 weeks, with medical benefits for an equal amount of time.

Prior to layoff due to subcontracting, bargaining unit employees will be offered training and employment if there is appropriate IAM bargaining unit work available in St. Louis.

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SUCCESSORSHIP (New Language)

In the event that at any time in the future a sale of the St. Louis facility is considered, the Company will notify the Union as soon as practicable prior to the closing of any sale transaction and if possible will provide the Union with the contact information for the prospective purchaser. The Company will encourage the purchaser to bargain in good faith with the Union over the terms and conditions of employment as well as to maintain the provisions of the current labor agreement wherever possible.

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TECHNOLOGY & TEAMING

Also consistent with the objectives set forth above, the Company and the Union agree to work together to establish joint teams, such as the IAM’s High Performance Work Organizations or other like programs.

The Union and the Company recognize the mutual benefit of working in partnership to achieve our common goals for the workplace. The Company and the Union also join together in support of building an HPWO that emphasizes greater employee involvement in all aspects of the Company’s operations. We will work in alliance to improve the Company’s competitive positions while ultimately achieving a better quality of work life and job security. Such a partnership will include HPWO guidelines but not limited to any other mutually agreed to guidelines developed by the Union/Management Steering Committee to create a strategic business plan that will:

Provide a vehicle to improve the profitability of the Company, thereby providing an environment that promotes job security and family wages
Promote comprehensive uses of resources
Recognize the right of workers to participate in decisions that affect their work life including the direction of the company
More effectively provide value to our customers
Provide a stable learning-oriented environment for members and employees
Create a highly trained, flexible self-directed Workforce

Both parties will work to advance the development of a High Performance, agile workforce. Resources required for this initiative shall be discussed between both parties, and any cost increases related to this initiative must be approved by the employer.

It is understood that the process will not compromise the Union’s right to represent its members on the work floor in the bargaining process, nor will it compromise the rights of management, subject to the provisions of the collective bargaining agreement, or the Company’s obligation to meet customer and business expectations.

The planning and implementation of the partnership agreement shall be administered by a joint Union/Management Steering Committee.

The Company and Union will meet and designate “Pilot” program areas within 90 days of contract ratification. The program will be implemented plant-wide under the direction of the joint Union/Management Steering Committee.

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JOB DESCRIPTION

Title: Machinist Job Code: 2

General Statement:

Responsible for the machining, finish, inspection and sub-assembly of components. Sets up and operates machine tools, hand and power tools, and gages and measuring instruments. Responsible for delivery of finished product to the next operation. Responsible first-level maintenance, tool maintenance and repair. Responsible for maintaining a safe work area, safe work practices, for high quality, for high productivity, for integrity, and for compliance with Company instructions and directives, including the Company’s prohibition against discrimination and harassment.

Duties:

Performs all necessary job functions including but not limited to the following:

1. Layout, setup and operation of all machine tools, including the operation of multiple machines, and other related equipment.

2. Should a dispute arise involving the work-load of running multiple machines the appropriate Company and Union personnel shall meet to discuss if the job assignment is reasonable. This discussion shall include the type of material being machined, the amount of cutter changes, etc. This discussion is meant to enhance quality and productivity and to not interrupt and/or interfere with duties as assigned. The decisions of management are final and matters related to this paragraph #2 can not be submitted as a grievance under Article 10 of the Labor Agreement.

3. Finish, repair and rework parts.

4. Fabricate, rework and repair tools, parts and assemblies.

5. Assure product quality including first article inspection.

6. As directed, assist any employee in any job classification in the performance of their duties.

7. Perform any other activity as directed, including movement, packaging, protection and crating of material, product and any manufacturing related items and operation of material handling equipment. Responsible for the storage and retrieval of production tooling.

8. When assigned as Leadperson: Assist and direct personnel to meet quality, cost and schedule requirements. Coordinate production problem resolutions and process improvements. Communicate with production and support personnel. Instruct and train personnel. Perform shop work.

Education and Training:

Must have knowledge of shop mathematics, machine speeds and feeds, cutting qualities of materials, production methods and shop practice. Work from information such as drawings, sketches, charts, handbook formulas and verbal instructions.

Experience Required:

Four to five years experience in this or comparable classification.

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ARTICLE 5 – WAGES

Section 10

A. The parties agree to adopt the performance sharing plan that would provide a mechanism through which bargaining unit employees can materially benefit from improvements such as business performance, product quality, efficiencies, safety, etc. and paid on an annual basis. The parties agree that the performance sharing plan shall be established through a consensus of both parties within 60 days of ratification of this agreement.

B. The company agrees to prepay the full annual performance bonus as described in Article 5, section 11A based on a unit-wide average. Of the bonus, $1,000 will be paid in the next scheduled pay date. (December 23, 2005) The balance will be paid on 13 Jan 2006. In subsequent years (2007 & 2008), we will prepay 3 days of the performance bonus on the first pay date after 01-April. If the actual payout for subsequent years is greater than 3 days, the additional days will be paid during the normal bonus schedule.

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PRE-RETIREMENT ELECTIVE (New Language)

All active employees when they become eligible for full retirement may elect their Retirement Pension option. This option may be changed up to the time of their commencement date.

Life and 10-Year Period Certain Option (New Language)

This form of payment guarantees a monthly pension for your entire life. In addition, if you die before benefits have been paid for the 10-year period, your beneficiary will receive the same monthly benefit amount for the remainder of the 10-year period. For example, if you elect this option and die two years after your benefit payments begin, your beneficiary will receive the same monthly benefit amount for the remaining 8 years of the 10-year period.

Because of this arrangement, the monthly benefit amount will be less than it would be if it were paid as a single life annuity. The amount of the benefit reduction depends on your age at retirement.

If you are married and want to elect this option, you must have your spouse’s written consent on your Commencement Election form and have it witnessed by a notary public. If you are married and elect this option, your spouse automatically is your beneficiary. If you want to designate someone other than your spouse as your beneficiary, you must have your spouse’s written consent. Your spouse must sign the spousal consent section of the Commencement Election form and have his or her signature witnessed by a notary public. If you are single, you may designate anyone as your beneficiary.

If your beneficiary dies before the end of the period certain, you may name another beneficiary. If your beneficiary dies while receiving payments, the remaining payments will be made to his or her named beneficiary. If your beneficiary dies before you, and you do not name a new beneficiary, your remaining benefits will be paid to a beneficiary determined by the Plan.

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Letter of Understanding “O”

Union Meetings

The company agrees to endeavor to avoid requiring mandatory overtime for lodge meetings whenever business conditions allow.

Letter of Understanding

Company will establish a process for Building 2 with the Union to enable qualified and capable senior employees to obtain open positions on the shift of their preference.