UAW workers reject Oshkosh pact for second time

By John D. Stoll

OSHKOSH, Wisconsin (Reuters) - Workers at defense contractor Oshkosh Corp turned down a new five-year contract offer from the company for a second time in little more than a week on Saturday even after union leaders narrowed differences between the two sides in recent days.

About 63 percent of hourly employees working in northeast Wisconsin plants represented by the United Auto Workers union voted to reject the contract, UAW Local 578 President Nick Nitschke said in an email to Reuters.

The company's desire to work with the UAW on future hiring of temporary workers remains a key sticking point, he said.

The UAW and Oshkosh plan to resume bargaining in the near future. Oshkosh spokesman John Daggett said in a statement that production employees will report to work on Monday at their normal work schedules and there will be no interruption in production.

UAW-represented workers at Oshkosh, totaling 3,000 more than employees, rejected Oshkosh's first contract offer on September 30 even though that meant losing a $2,000 signing bonus.

Company and union officials spent the past week negotiating a new deal that included reworded language on seniority and temporary workers, and a revised financial package.

Oshkosh is a leading manufacturer of a broad range of military, fire and emergency and commercial vehicles.

The labor talks are being closely watched by investors and analysts who have been concerned about the company's exposure to a defense sector that is under pressure.

Tension over temporary workers is not the only problem still left to resolve. The company's move to increase its pay-raise offer from 8 percent in the original contract offer to 8.5 percent through 2016 "didn't fly with higher insurance costs," Nitschke said. Oshkosh is proposing to raise health care premiums and insurance co-payments.

"It's time to get it done," Nitschke said. "We are not going to let it go on much longer ... we will have to do what it takes."

(Reporting by John D. Stoll; editing by Bill Trott)