Bob Hinkle, assistant director of the mid-Atlantic region for UNITE HERE union, said that under the terms of the agreement, furloughed workers will receive $175 for every year they worked at GST and insurance coverage for the remainder of the month in which they are laid off and the next month.
Hinkle said he believes the agreement favors more senior workers and could prompt some of the company's newer workers to find employment elsewhere.
About 20 workers have left since the January announcement, according to Roger Stone, president of UNITE HERE Local 658T.
"I think the people with a lot of seniority will stay," Hinkle said. "I think for somebody with five, six, seven years, it's not going to be worth it."
Bill Walker, human resources director at GST, confirmed the agreement, but would not discuss its terms. He said GST sought to establish the severance package both to encourage workers to stay at GST and, in the event of layoffs, to assist them in transitioning to other jobs.
Hinkle said the union wanted workers to receive about $600 a week for every year with the company as a show of respect for their service to GST.
"I think it's a shame," he said. "To me, it's totally disrespectful. For the years of service the people put in - 20, 25, 30 years - this is not right."
Stone said workers knew they were at a disadvantage entering the talks, dating to January, because they had failed to gain the concession in the contract they negotiated with GST in July 2003.
He said they could not hope to get more than workers at the company's Fleetwood, Pa., plant, who had negotiated in their last contract for severance pay of $200 for every year of service. That plant closed in February.
"It's not as much as I would have liked, but it's better than nothing," said Stone, who characterized the package as a victory considering the company had no obligation to offer severance pay. "We had no leverage at all."
The company closed its cutting plant last year, affecting about 180 workers, and in January announced it would close its retanning operation by the end of July. Both closures came as the result of a long-term agreement the company entered into with Mexican company Cueros Industrializados del Bajio, S.A. de C.V., to move the work to two plants there.
On June 3, Walker notified the Maryland Department of Labor, Licensing and Regulation that the company planned to eliminate 200 jobs in the Williamsport plant's retanning, finishing and color departments through Aug. 2. Walker and Hinkle said Thursday those layoffs had not begun, and Walker said there is no clear date for when they will occur.
Patrick Baker, state administrator for dislocated services with the DLLR, said GST did not specify in its filing when the layoffs would occur. Baker said that with the notification, GST workers will be eligible for dislocated-worker benefits once the layoffs begin.
"It only kind of hints that there could be layoffs," he said.