CHARLOTTE, N.C.—It´s not 2006 yet, but negotiations for tire industry contracts expiring next year are starting already.
Continental Tire North America Inc. announced Oct. 20 it will begin talks with the United Steelworkers union regarding the hourly work force at the company´s Charlotte passenger and light truck tire plant. The pact between Conti and USW Local 850—ratified in September 1999—expires April 30. It was preceded by a yearlong strike.
The Charlotte-based subsidiary of German tire maker Continental A.G. requested that negotiations between the two sides begin so they can address high manufacturing costs at the Charlotte site. No date has been scheduled yet, but the two sides have agreed to meet first in Pittsburgh, where the Steelworkers are headquartered, a Conti spokeswoman said.
The company has told the union the facility has the highest production costs of any Conti plant worldwide, said Rick Ledsinger, the firm´s vice president of human resources. "By working together with our employees and their union representatives, we hope we can negotiate a new agreement that will reduce our manufacturing costs and assure the future success of the Charlotte plant," he said.
The effort to negotiate the manufacturing cost reductions in Charlotte is not related to the expiration of the agreement in April, the spokeswoman said. Conti must reduce the costs as soon as possible if the plant is to remain an integral part of the company´s North American manufacturing platform, she said.
However, no decisions on Conti´s part have been made regarding the future of tire production in Charlotte or any reductions in the work force, the spokeswoman said.
Ron Hoover, USW executive vice president in charge of the union´s Rubber/ Plastics Industry Conference, looks forward to sitting down with the company and analyzing the numbers to get a real picture of the situation there. He´s looking for a clear sense of direction for Conti´s strategy in North America, including investments and marketing, he said.
In June, Conti trimmed its production at the Charlotte plant by about 30 percent to 17,000-18,000 units per day. It cited high inventories and high manufacturing costs as reasons.
Hoover did insist, however, that anything accomplished in Charlotte should not be perceived as setting a bargaining pattern for the rest of the tire industry. USW master contracts with Goodyear, Bridgestone/Firestone and Michelin North America Inc.´s BFGoodrich tire manufacturing unit expire in July.
The Charlotte factory is just one of three unionized Conti sites with concerns about the future. In Bryan, Ohio, the potential sale of the off-the-road tire facility still is up in the air. Rodos L.L.C. reached an agreement with Conti in January to buy the Bryan plant, and the deal was to close this summer, but the suitor hasn´t been able to reach a collective bargaining agreement with the USW.
No new talks have taken place regarding the sale, but Titan International Inc. entered the scenario as a prospective buyer last month after forming a partnership with Rodos.
At Conti´s Mayfield, Ky., plant, where tire production was phased out in 2004, the company and union reached a settlement outlining severance pay, supplemental unemployment compensation, health care stipends and other benefits for the laid-off workers. More than 80 percent of the workers, who are members of Local 665, approved the package, a USW spokesman said.
By the terms of the agreement, anyone laid off on or after June 30 of last year is eligible for severance pay of $1,000 per year of service up to 25 years and $5,000 a year after 25 years. Each worker still laid off also receives a $5,500 stipend to be used to purchase health care.
Workers with 25-plus years of service laid off after Dec. 31, 2004, and before Dec. 31 of this year, who do not accept the severance pay component, are eligible for supplemental unemployment benefits, the agreement said. The payment is $350 per week until a plant recall or 18 months of being laid off, retroactive to that layoff date.
Another USW contract expiring next year is the pact with Titan for workers at its Des Moines, Iowa, farm tire plant. Negotiators for Titan and the USW met in Pittsburgh the week of Oct. 17 to get an early start on those talks, a USW spokesman said. The current contract runs through Dec. 15 of next year.
A 40-month strike at the Des Moines facility, which started in May 1998 and ended in September 2001, was the longest in tire and rubber industry history.
Bargaining also continues between Titan and the union regarding the company´s purchase of Goodyear´s agricultural tire business, including its Freeport, Ill., manufacturing plant, the union spokesman said. The two tire firms announced the sale in February, but have extended the deadline three times as Titan and USW negotiators try to hammer out a new agreement.