Interim Joint Committee on Labor and Industry


Minutes of the<MeetNo1> 3rd Meeting

of the 2006 Interim


<MeetMDY1> September 12, 2006


The<MeetNo2> 3rd meeting of the Interim Joint Committee on Labor and Industry was held on<Day> Tuesday,<MeetMDY2> September 12, 2006, at<MeetTime> 2:30 PM, at Kentucky Dam Village, Gilbertsville, KY<Room>. Representative J. R. Gray, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative J. R. Gray, Chair; Senators Julian M. Carroll, Brett Guthrie, Denise Harper Angel, Richie Sanders, Jr., Jack Westwood, and Ken Winters; Representatives John A. Arnold, Jr., C. B. Embry, Jr., Charlie Hoffman, Dennis Horlander, Joni L. Jenkins, Jim Stewart III, and Brent Yonts.


Guests:  Rep. Fred Nesler, Hank List, Greg Higdon, Jim Zimmerman, Jitter Allen, Joe Norsworthy, Jody Richards, Speaker of the House.


LRC Staff:  Linda Bussell, CSA; Adanna Hydes, Melvin LeCompte, and Ashli Schmidt.


Chairman Gray welcomed the committee members and guests to the 6th legislative district of the Kentucky House of Representatives, which he represents and to the annual Kentucky Labor Management Conference.  He asked for a moment of silence to remember the victims and families of September 11.  Chairman Gray then asked for a motion for the approval of the minutes for the August meeting.  Rep. Arnold made the motion, and it was seconded by Sen. Denise Harper Angel.  Chairman Gray informed the members that Sen. Alice Forgy Kerr was unable to attend the meeting and sent her regrets. In a departure from the agenda, Chairman Gray recognized Mr. Gene Strong, Secretary of Economic Development to update the members and guests on the situation with Ford Motor Company in Louisville.


            Secretary Strong introduced fellow Economic Development Cabinet employees J.R. Wilhite, Robert Curry, and former employee, Kenny Carroll.  Secretary Strong reiterated that major changes are being made in the Ford Motor Company, and everything appears to be on the table at this point.


            Secretary Strong noted that there are approximately 8800 Ford employees in Kentucky. He also noted that the Louisville Assembly Plant makes sports utility vehicles (SUV’s) and that sales for this market are down 25-30%.  While in Detroit, Secretary Strong, Governor Fletcher, and Mayor Abramson discussed with Ford officials opportunities that Kentucky and Louisville could provide to help Ford survive and possibly expand production in Kentucky.  Many of the ideas discussed would potentially need legislative action.


            Secretary Strong stated that the Ford Motor Company has a $2.2 billion a year economic impact in Kentucky, and the upcoming decisions of Ford would not only have an effect on Louisville, but would create a ripple effect that would be potentially devastating to Kentucky.


            He thanked the committee for their time and noted that Kentucky has been a strong partner to the Ford Motor Company for years and he hopes that strong partnerships will continue.


            Chairman Gray then welcomed Mr. Gary Mielcarek, Public Affairs Manager, United Parcel Services (UPS) in Louisville to discuss UPS expansion in Louisville.  Mr. Mielcarek thanked the committee for inviting him to appear and provided a brief history of UPS and the impact it has had in Louisville.


            UPS employs over 350,000 employees worldwide, with half of those being Teamsters members.  UPS is Kentucky’s second largest employer with 18,000 people in the Louisville area, and 21,000 in Kentucky.  Under the most recent labor agreement with the Teamsters, UPS has committed to add a minimum of 150 full time union jobs between 2002 and 2008.  The company added 100 full time, union day jobs between 2002 and 2003.


            Mr. Mielcarek stated that the UPS policy states “We develop and maintain professional relations with labor unions.” UPS has a long history of maintaining good relations with all of its employees and the union leaders who represent them.  This is a legacy instilled by the founder of UPS, Jim Casey, who, in 1907, borrowed $100 to launch the American Messenger Company. The company officially changed its name to United Parcel Service (UPS) in 1919.  In post-World War I America, Jim Casey saw the advantages of a unionized workforce, therefore he invited the International Brotherhood of Teamsters into UPS structure.


            When UPS started its overnight services in Kentucky in 1982, there were 150 employees and a sort facility one tenth the size of the sort facility today.  At that time Louisville was struggling economically, unemployment was high, and the population was declining.  However, UPS saw potential in the area and the pro-business climate and forged a partnership with airport authorities and state and local political leaders.


            In 1988 UPS formed its own airline and announced a $700 million expansion, which included the addition of two paralle runways.  Louisville then became the site of the UPS Airlines headquarters.  In 1998, UPS announced the largest capital construction project in the company’s history, Hub 2000.  Over $1 billion was invested in the expansion, which was completed in 2002 and created 6,000 new UPS jobs.  In 2005, UPS acquired Menlo, and announced an air freight facility and the addition of 1,000 jobs in Louisville. Lastly, this summer UPS broke ground on another billion dollar expansion in Louisville that will nearly double the size of Worldport when it’s completed in 2010.


            UPS has spurred tremendous economic growth over the years for Kentucky.  Mr. Mielcarek stated that according to Greater Louisville, Inc., it has resulted in 36,000 airport related jobs with a $1.5 billion annual payroll and generated $220 million in state and local taxes.  UPS’s growth and expanded capabilities mean continued economic benefit and growth for Kentucky.


            Mr. Mielcarek noted that UPS operates Metro College, a partnership between UPS, and local, state, community and educational leaders that pay 100 percent of participating students’ tuition costs.  UPS pays half and the state pays half.  There are 1,800 UPS employees enrolled in Metro College this current semester.  Another 165 are enrolled in School-to-Work, a similar program sponsored by UPS that allows high school seniors to gain valuable work experience while earning college credits.


            Mr. Meilcarek closed by saying that is it an exciting time to live and work in Kentucky and UPS understands the value of a positive labor-management relationship in creating a climate for success.


            Chairman Gray thanked Mr. Meilcarek for his service and commended UPS for what it has done for the Commonwealth.


            Next, Chairman Gray introduced Mr. Tom Cannady, Executive Director, Office of Labor Management Relations and Mediations, Kentucky Department of Labor.  Mr. Cannady thanked the committee and noted that many members only hear about the Labor Management office at the annual conference, yet the office has duties and responsibilities that keep the staff busy year round.  He stated that the Office of Labor Management Relations is trying to move into the 21st century and in this effort has hired an employee with experience to provide labor management training programs.  In 2004, the Office conducted only three trainings, but in 2006, 28 training sessions have been conducted thus far.  Mr. Cannady also mentioned that the Office has hired two full time mediators to support the efforts of Mr. Phil Anderson, Commissioner of Labor, in his duties to facilitate settlements and resolutions of labor management disputes.


            Sen. Carroll commented that he is interested in learning more about the growth in local labor management committees. Mr. Cannady responded that there are approximately 130 local labor management committees in Kentucky.  Sen. Carroll asked what sort of financial support from the state budget does the Office of Labor Management need to help make the local labor management committees succeed?  He also noted that he is pleased the the Labor Management Conference is again being held at Kentucky Dam Village, commended the work of the Office of Labor Management, and offered any support that he could give.


            Mr. Cannady replied that until five years ago the state budget provided $125,000 in grant money for the creation and support of local labor management committees.


            Chairman Gray reminded members of the October 19, which will be held meeting in Lexington.  There being no further business, the meeting was adjourned.