(see news release)

I am sure that many of you have articles in the newspapers and on the internet regarding the settlement JCI entered into with the UAW to settle the recent strikes. I know many of you have been interested in learning more about what happened and understanding how it will affect us. Earlier today, I received a briefing that answered most of my questions. Now, I want to share that information with you.

As part of the strike settlement, the Company agreed to a Neutrality and Acard check@ arrangement with the UAW. The terms of this agreement are intended to make it easier for the UAW to become the representative of JCI’s employees B and to help set the stage for JCI-ASG to begin building anew kind of relationship with the Union. JCI management did this because they felt that, when they looked at the big picture B and looked toward the future and where our business with the Big Three was headed B building a relationship with the UAW was something that was in the best interest of our future as a Company.


The UAW and JCI-ASG have committed to developing a relationship that will be mutually beneficial over the years to come. To this end, the UAW and JCI-ASG have entered into the Neutrality Agreement that was part of the June 2002 negotiations. This Agreement provides a procedure that greatly facilitates the UAW’s ability to organize the portion of JCI-ASG’s business that is tied to the UAW represented Big Three assembly plants in the United States. These newly organized plants will provide the parties the opportunity to develop fresh, positive and constructive relationships. The Agreement further provides a process for collective bargaining and arbitration that will greatly reduce the chance that strike could mar the development of the relationship. In moving down this road, the parties acknowledge that JCI-ASG’s fundamental business objectives include labor peace, the avoidance of disruptions in production, and operational effectiveness and efficiency within its value system and culture; that the UAW’s fundamental objectives include providing effective representation for JCI-ASG’s employees and maintaining its presence, strength, and influence in its traditional sphere of influence in the automotive industry, consistent with its tradition and history as a important part of the American labor scene. Further, both parties are concerned with creating work environments where JCI-ASG’s employees are treated with dignity, respect, and fairness; have a meaningful voice in issues and events that affect them at work; and, have high levels of job satisfaction and a focused commitment to helping the Company fulfill its obligations to its customers. By entering into this Neutrality Agreement, the parties have taken the first step toward building the kind of relationship that will enable them to achieve their respective objectives and be even more successful organizations in the future than they have been in the past.

Everyone in JCI management realizes that this is a big change for the Company and everyone who works here. Under the Neutrality Agreement, the rules have changed B the Company’s approach will be different B and, going forward, we all will have to get used to doing things in new and different ways.

The Neutrality Agreement has four major parts to it. First, there is the part requiring the Company to remain neutral when it comes to the issue of the Union. Second, is the arrangement for UAW to have access to employees on Company property and under certain conditions and to be able to get personal information about employees so the UAW can communicate with them at their homes. Third, is the card check agreement B under which JCI will recognize the UAW as the representative of the employees based on signed authorization cards B without an election. Fourth, is the bargaining and no strike/arbitration provision B which encourages the parties to reach an agreement on a contract within six months B and to submit disputed issues to arbitration instead of having a strike.

Next, lets look at the issue of the UAW’s access to our property. The details of exactly how this will work are still being discussed, but I understand that the UAW visitors will only be in non-work areas of our facility B like the parking lot, break room, and smoking area. They also will only be visiting with you during times when you are not working B like at breaks and before and after shift. At this time, I don’t have any information as to when or if these UAW representatives may show up.

Next, is the card check arrangement. Under the Neutrality Agreement, once the Union demonstrates that it has a majority of the employees in a plant signed up on authorization cards, JCI has agreed to recognize the UAW as the collective bargaining representative for the employees in the defined bargaining unit. The UAW no longer will be required to win an NLRB election to become the recognized bargaining representative. Instead, as soon as the UAW says it has signed authorization cards from a majority of the employees, the parties will make arrangements to have a neutral person B in our case it will be federal or state mediator B review the cards against a list of our current employees. If it is determined that the Union represents a majority of our workforce, then JCI will recognize the Union as the representative of everyone in the bargaining unit.

Finally, let’s look at the part of the Neutrality Agreement dealing with bargaining. Once the UAW is recognized by JCI, the Company and Union will sit down to negotiate a contract. Under the terms of the Neutrality Agreement, the Union has agreed not to strike over the first contract. Instead of using a strike to try to settle things, the parties have agreed to take to arbitration any issues that can’t be resolved at the bargaining table. Since arbitration will occur for issues that remain unresolved after six months of negotiations, the bargaining process should never take much longer than that B and, of course, things could be wrapped up in a shorter period of time.

As you know, JCI-ASG already has unions B including the UAW B at some of its other locations. And, as far as I know, JCI has had constructive and positive relations with those unions.

At this time, I’ll try to answer your questions about the Neutrality Agreement, the card check procedure, the meeting scheduled for next week, or anything else I covered today.

[Take Questions]

Thank you for your attention.