Workers ratify contract at plant building SEPTA railcars

Workers at a South Philadelphia railcar assembly plant ratified their first union contract with the South Korean manufacturer Saturday.

The three-year contract between Hyundai Rotem Co. and Transport Workers Union Local 234 calls for wage increases of 13 to 16 percent, a signing bonus of 3 percent, reduced worker costs for health insurance, creation of a 401(k) retirement account with an employer contribution, increases in paid sick and personal days, and changes in work rules.

The contract also specifies that the workers will not be dismissed after completion of the current assembly of 117 SEPTA railcars. The plant is expected to remain open to build railcars for transportation agencies in Boston and Denver.

The contract will take effect Jan. 1. TWU Local 234 also represents SEPTA bus drivers, subway and trolley operators, and mechanics.

The ratification vote was 77-11, said union attorney Claiborne S. Newlin. The union represents 127 workers in a total workforce of about 200.

The company offered no immediate comment.

Hyundai Rotem, a subsidiary of the South Korean automaker Hyundai Kia Motor Group, is assembling Silverliner V railcars for SEPTA at the South Philadelphia plant, and the company has fallen far behind schedule in delivery of the cars.

There has been frequent friction between the predominantly black and Hispanic workforce and Korean managers at the plant. The National Labor Relations Board last August ordered the company to offer reinstatement to nine fired workers and to pay them a total of about $95,000, after finding that union workers were singled out for unfair discipline.

The South Philadelphia plant has delivered about half the 117 SEPTA cars, and the rest are expected to be delivered by the end of 2012. About 40 of the new cars are now in service for SEPTA.

Production snags - including material delays, design flaws, labor-management conflicts, and workmanship problems - have put the delivery of the new cars more than a year behind schedule.

SEPTA ordered 120 Silverliner V cars from Hyundai Rotem in 2006 for $274 million. The first three cars were built in South Korea and put into service by SEPTA in October 2010.

The total cost, including spare parts and associated training and management, is $330 million.

Hyundai Rotem is liable for a penalty of $200 for each day each car is late.

The new cars will replace 73 Silverliner II and III railcars built in the 1960s. With the retirement of the old cars and the addition of the new ones, SEPTA will have about 400 railcars by next year, reducing chronic passenger overcrowding on some lines.