Looking for a preview of the rubber industry labor-management situation in 1999? Look at 1998. The last year of the 20th century should be a repeat of what occurred in 1998 in the rubber industry labor arena: Generally, more jobs moved overseas; more automated plant capacity was added at home, requiring fewer production workers; and more warfare between the United Steelworkers of America and determined cost-cutters like Titan Tire Corp. and Continental General Tire Inc.
All in all, not a great time to be a union member in the U.S.
The tire and rubber goods business continued to ride the strong economy to positive financial returns in 1998. Still, union jobs migrated overseas, and the big expansion dollars in North America mostly ended up at non-union sites.
Expect that trend to continue—and with good reason.
An astute company doesn't wait until a recession to enact cost controls. The time to make sure the corporate house is in order is during the boom period, so the inevitable economic downturn won't be too debilitating, or even fatal.
That's a big reason many rubber manufacturers—especially in the global-oriented tire segment—are being tough on their unions. Companies will continue to take cost out of the process wherever they can, and labor expenses remain a certain target.
How the Steelworkers fare under such pressure in 1999 will set the stage for the big contest to come—the master contract talks between the union and two, possibly three, major tire makers in 2000.