Michelin North America Inc. and the United Steelworkers of America secured labor peace in 2004 via new contracts, but as in 2003, the union ended the year in limbo with Bridgestone/Firestone.
USWA members at three BFGoodrich tire plants in the U.S. ratified a master contract Aug. 26, providing job stability for about 3,400 workers and plant protection for the life of the pact. Workers at Michelin's BFGoodrich tire factory in Kitchener, Ontario, who had gone on strike June 1, also overwhelmingly approved a new deal Aug. 23.
Both contracts will expire July 22, 2006.
Michelin said the contracts provided ``groundbreaking'' cost reductions that would translate into an eventual 20-percent cut in the $300 million annual labor costs, improved efficiency and long-term viability at the four locations. The union members agreed to increased shares in active and retiree health care costs, a five-year wage progression program, reduced cost-of-living bumps and greater use of contingent staffing.
The pacts didn't address import restrictions or neutrality language, two issues included in the union's September 2003 agreement with Goodyear, but Michelin did commit to an investment of $150 million at the four facilities over the life of the contract, specifically for the production of ``higher-margin, larger, branded'' tires.
Negotiators for Michelin and the USWA began bargaining in July for the first time in six months. The workers at the three U.S. plants-in Opelika and Tuscaloosa, Ala., and Fort Wayne, Ind.-had been working on a day-to-day extension since April 2003, when the previous three-year agreement expired.
The talks also centered on resolving the strike at the Kitchener factory, where about 1,000 USWA members had walked out. Local 677 struck because its members believed Michelin was asking for too many concessions in its proposals, particularly because the Kitchener plant was profitable.
The initial offers exchanged in Pittsburgh, where the two sides convened July 14, failed to impress. The union claimed the company summarily rejected its proposals, while Michelin asked for cost reductions in the form of a 50-cent permanent deferral of the cost-of-living allowance, a two-tiered wage scale capping earnings of future hires, the elimination of retiree medical benefits for future hires and increased co-pays on medical and drug benefits.
Little progress was made until early August. The union on Aug. 8 declared an Aug. 12 strike deadline if no deal was reached, but the two sides worked past the zero hour into the next week, eventually reaching tentative agreements on Aug. 20.
BFS/USWA negotiations originally were next on the priority list after the Goodyear pact was finalized in fall of 2003, but the union walked away from those talks in November 2003 after the company's proposals failed to address several issues from the Goodyear agreement. The two sides hadn't talked until mid-November of this year, when they met and decided there was common ground to restart negotiations.
Formal discussions began Dec. 6 in St. Louis. Like the Michelin workers, about 6,000 unionized BFS employees at eight tire and rubber sites have been without contracts since April 2003.
Talks also are continuing with Yokohama Tire Corp. regarding workers at its Salem, Va., plant, where their contract expired in July 2003.