by Ron Kutak, Guild Executive Director

Our recent renegotiation of the basic agreement was unanimously ratified by all the IATSE locals, with an almost 90 percent vote in favor by the IA membership. Local 700 members also voted overwhelmingly for the contract. The margin of victory among Guild members was 89% — 1,319 in favor and 155 opposed.

One of our goals in these negotiations was to conclude the agreement early, without “crisis bargaining,” that is, without bargaining until the final hours of the old agreement at the end of July. In a poor economic environment, we wanted to avoid any negative impact on production due to a slowdown or transfer of work because of fear on the producers’ part of labor unrest. We did not want to bring about a repeat of the “de facto” strike that took place prior to the successful renegotiation of the WGA and SAG contracts during their last cycle.

What we achieved is extremely important to every Local 700 member.

Health Plan

We came into these negotiations in the midst of a nationwide crisis in health care. Many plans are reducing benefits, increasing member payments or creating tiered service levels, and the cutbacks have often been drastic. Many of the other Hollywood guilds have been forced to make hard choices to keep their plans afloat. Our plan was facing dangerously shrinking reserve levels, which threatened its long-term viability. So our first and foremost goal was to put the plan on a sound financial footing and to do this without member sacrifices — something that seemed almost impossible at first.

Prescription drug costs are also skyrocketing, at more than five times the rate of inflation. We did accept a slight increase in the drug co-pay, but we felt that this was a small price to pay for a plan that remains one of the most generous in the nation.

Pension Plans

As you know, IA members enjoy two pension plans: a traditional “defined benefit” plan and a “defined contribution” plan (the IAP) that invests money for participants and later allows them to draw on it. Going into these negotiations, our concern was focused on the defined benefit plan. The IAP is funded by payments based on a percentage of scale and has seen steady increases in contribution levels over the years, but the defined benefit plan has not seen an increase in hourly contributions since the late 1970s. We knew that the plan needed additional money in order to deal with future benefit increases that we felt had to be made.

In the negotiations, we were able to establish increases in the hourly pension payments made by the producers, along with a variety of other technical changes that together should produce significant pension improvements. An increase of 7.5 to 15 percent in the defined benefit formula will be adopted in early 2006 with retroactivity to anyone who retires after August 1, 2003.

We were also able to improve the contributions to the IAP from 4 to 4.5 percent of the hourly or weekly rate, effective August 1, 2004, and there will be another increase to 5 percent effective July 31, 2005.

This contract also established two important precedents for us regarding Internet distribution. First, shows that are produced under the basic agreement and are distributed on the Internet as a secondary market will now make residuals payments into the plans. Second, based on new language we were able to adopt, we expect that signatories to our agreements who eventually make product for the Internet as a primary market will negotiate an agreement with the IATSE.

Other Issues

The agreement includes standard percentage increases for the last two years of the agreement and a 50-cent per hour scale increase in the first year. This was a difficult compromise for us to make and we would have preferred percentage increases in each year. But our primary and most difficult goal was to ensure the viability of the plans for years to come. This represented a much larger amount of money for the producers and a much bigger win for members than any yearly increase ever could, because any member working overscale would not benefit from a scale increase. In addition, health plan improvements are shared by all members equally, including members working overscale and retirees. (Keep in mind that qualified retirees receive benefits for life.) We felt that a slightly adjusted raise for one year was a small price to pay in order to shore up the plans in such a fundamental way.

I also want to briefly point out another part of the agreement. The producers were given the right to prorate the last week of employment for sound editors in special “unforeseen” circumstances. This must be policed so that we can be sure it isn’t abused. Sound editors should call the office, speak to a field representative, and let them know whenever their employers invoke this provision to pay for a partial last week. I am sure there are those who will try to extend this provision to cases beyond those that the bargaining parties intended — we’ll need your help to make sure this doesn’t happen.

Finally, these negotiations included discussions about the establishment of a 401k plan. Many members have asked for this and it is now being studied formally by a joint IATSE-AMPTP committee. I will report to you again when we have something concrete.

Changes to Our Offices

Our Los Angeles headquarters on Sunset has been co-owned by us and Local 600, the International Cinematographers Guild (ICG) ever since it was built. But ICG has decided the space is too small for them and have purchased a building across the street, with renovation to be completed this fall. Per the original building agreements, we will buy out their share and take over the building in its entirety. This is good news for the Editors Guild because we are running out of space, and like ICG, felt increasingly constrained. Additional room will allow us to expand in ways that we’ve envisioned for some time. We hope to create a large conference room for seminars and classes, open up more room for training and allocate space for new offices. The rest of the space will be rented out. This should result in some additional revenue for us, because the two Guilds have paid a very reduced rate for the space we respectively occupy, and any new tenant will pay full market rate.

In New York, we have been renting space from the organization that oversees the New York health and pension plans. But our merger also included a plans merger, which means that as the New York plans cease to exist we will have to relocate or pay much higher rents. Our decision, after extensive deliberation, was that purchasing space in the city was much smarter than leasing — a ten-year lease would cost about the same over the term of the lease as it would to buy the space outright. So we are now in the process of purchasing office space at 145 Hudson Street in Tribeca. One of our advantages in making this kind of decision is that as an organization, we have a very long time frame. The new building will save the Guild an extraordinary amount of money in the years ahead and it gives us an excellent anchor in New York to run our East Coast operations.

To give us a presence in the Midwest, we have also recently established an office in Chicago, manned by former L.A. organizer and field representative Andy Larson.

Guild Finances and the Stock Market

Guild members may be wondering what the plummeting stock market has done to our organization’s finances. You will be pleased to learn that because most of our money is in very conservative bond funds, the deflation of the stock market bubble has not impacted the Editors Guild in any real way. We view ourselves as custodians of the members’ money and have maintained an average return of roughly five percent a year even in these very difficult times. Our investments are managed by John Ebey of Merrill Lynch, the same person who oversees the investments of the Motion Picture Industry Pension and Health Plans. Treasurer Rachel Igel and I meet regularly with him to ensure that our investments are prudently made, and a yearly report is made to the Board of Directors by both John and our accountant.

We are in very difficult economic times in our nation, and the current world unrest only serves to make our financial future even more unpredictable. Our job is always to create as much work for our members as possible, under conditions that provide both a decent living and future security. I believe that the recent negotiations did just that. With the contract behind us, we must now continue to focus on organizing. Anyone working non-union should report their jobs to the Guild (anonymously if you need to), and when you choose a video or sound post house, be sure to check their union status. Our goal is to go after all non-union productions and facilities. It will be a slow and difficult road, but our success as an organization depends on it. We must all work together and support each other if we are to succeed.