Job security, health care and retiree benefits were among the main issues in tire industry master contract negotiations in 2003, and their importance won´t diminish when talks begin in 2006.
Contracts between the United Steelworkers union and several companies—including Big Three tire makers Goodyear, Bridgestone/Firestone and Michelin North America Inc.—expire in July. That means talks will begin in the months preceding those deadlines.
The USW´s Rubber/Plastics Industry Conference will hold its policy meeting, the precursor to negotiations, in mid-March, said Ron Hoover, USW executive vice president and R/PIC chief. The conference will complete the bargaining goals and strategies at that time, he said, so he doesn´t foresee having extensive talks with the tire companies before then.
Talks with the locals
Prior to March, USW officials will meet with local leaders and members and discuss the direction of the year´s negotiations, Hoover said. It is no secret, however, that keeping the industry´s manufacturing jobs in North America—a huge issue in the last round of negotiations—remains a top goal.
"I think job security will be the focus of our talks," Hoover said. "I´m looking forward to it. I think there will be some opportunities for good discussion."
Goodyear, the union´s bargaining pattern target in 2003, sought concessions that year to help it recover from its financial woes, and the ensuing agreement included the closure of the company´s Huntsville, Ala., tire plant. About 1,300 salaried and hourly workers were affected by the shutdown.
The remainder of Goodyear´s 12 tire or rubber plants covered by the master contract agreement were partially or fully protected from closure. Another facility, the Freeport, Ill., farm tire plant, became part of Titan International Inc. with Goodyear´s sale of its North American farm tire business to the agricultural tire and wheel maker.
USW members at the Freeport site approved a five-year contract with Titan Dec. 21.
Titan took care of another important piece of union business a year ahead of schedule, when workers at its Des Moines, Iowa, agricultural tire plant ratified a new contract, also on Dec. 21. The previous deal—approved in 2001 after a 40-month strike, the longest in tire and rubber industry history—was to expire Dec. 15 of next year.
Both the Freeport and Des Moines contracts expire Nov. 19, 2010.
The agreements reached with BFS and Michelin´s BFGoodrich tire manufacturing unit after Goodyear´s in 2003 didn´t follow the pattern closely. However, they did provide plant protection, capital investment and staffing level language that helped settle the Steelworkers´ concerns about job security, at least for the time being.
"Cost reductions are a continuing concern for tire companies," said David Meyer, professor of management and organization at Central Connecticut State University. "The Steelworkers are in a holding pattern. They aren´t as concerned about getting better wages as much as getting as many people retired as possible under the best circumstances."
Job security and health care are the most important issues to the workers, Meyer said. "Tire factory workers today are talented and smart, and they make good wages. Unfortunately they have to worry about holding onto their jobs and paying for health care."
A Goodyear spokeswoman said cost is always an issue for a North American manufacturer whose products must compete in a global market. The company wouldn´t comment further on the upcoming negotiations, though earlier this year the Akron tire maker said it would like to slash high-cost manufacturing capacity by 8 to 12 percent over the next three years to save $100 million to $150 million annually.
Hoover said he isn´t concerned about what anyone says before negotiations start, because he understands company officials have to send messages to Wall Street and their shareholders. But should a cost-cutting plan be presented calling for job reductions or another closed plant, "we could be looking at a battle," he said.
Bridgestone Americas Holding Inc., the U.S. parent of all BFS operations, will put money where it can get a return on its investment, a company spokesman said. It´s critical to the survival and success of the business to keep improving quality and cost, two areas in which BFS and the other tire makers are facing fierce competition, he said.
"The cost of manufacturing isn´t any more difficult than it has been in the past, but it´s a real challenge," the spokesman said. "We want to make world-class tires in the U.S. and make a profit doing so, but we´re in a place where the competition with low-cost producers is increasing. We have a lot of work to do, and need a strong working relationship with the union to do it."
BFS understands money is a huge concern in contract negotiations, but how the two sides work together and having the employees support the company is important as well, he said.
In addition to job security and investment issues, Hoover wants to see better benefits for retirees. The union´s members have stood up at contract time in the past for the former production workers, often kicking in cost-of-living allowances or other funds to help defray their health care costs.
"I´m proud of how our people have taken responsibility for our retirees," he said. "They understand who built the contracts they have today."
Hoover also wants to see a timely pattern settlement in 2006. The 2003 negotiation period stretched from early that year to the summer of 2005, when the BFS contract was ratified. That left little time between the end of the 2003 round of talks and the upcoming period.
In addition to the Big Three and Titan, contracts with Continental Tire North America Inc. lapse in 2006. Negotiators for Conti and the union began meeting this past fall to discuss the costs of operating the company´s Charlotte, N.C., passenger and light truck tire facility. The contract between the company and USW Local 850 expires April 30.
Contracts with Conti workers in Mayfield, Ky., and Bryan, Ohio, also were due to expire this year, but Conti phased out tire production in Mayfield in 2004 and recently reached settlement with the union there on severance language.
In Bryan, a deal between Conti and Rodos L.L.C.—reached last January—to buy the farm tire operation is still up in the air because Rodos hasn´t been able to reach a collective bargaining agreement with the USW. Titan is in the mix in the Bryan sale as well, having formed a partnership with Rodos in September.
The USW´s contract with Yokohama Tire Co. workers in Salem, Va., traditionally has followed the industry pattern, but their pact doesn´t lapse until April 2007. The later date was established primarily to avoid the delays caused by negotiations between the union and the Big Three tire makers.