CHARLOTTE, N.C.-Maybe No. 6 will be the charm. Maybe not.
Continental Tire North America Inc. is expected to present its sixth contract proposal to the United Steelworkers at bargaining sessions April 5-6. Conti´s new plan will focus more on wages and benefits of active workers at its Charlotte tire plant, according to Rick Holcomb, the tire maker´s legal counsel, and won´t bring into play benefits due retired workers-for the time being, at least.
Conti and the USW´s contract talks center around the company´s demand that $32 million in manufacturing costs must be slashed at the Charlotte factory for it to continue making tires at the site.
If that doesn´t happen, the German-owned tire maker plans to stop manufacturing tires at the facility. The firm´s current contract with the USW expires April 30.
The USW has countered Conti´s first five proposals with two of its own. The union´s last cost-cutting plan is being studied by the company, but it´s unlikely to fare better than the Steelworkers´ first proposal. The initial one was tossed aside by the company because Conti said the union´s cost savings amounted to only $1.7 million annually; the union said the package would save the tire maker $16 million per year.
Mark Cieslikowski, president of USW Local 850, which represents workers at the Charlotte plant, said the union´s latest plan would save Conti about $12,000 per employee, which he termed a substantial savings for the firm and would keep tire production in Charlotte.
Door remains open
Cieslikowski said the union is open to discussing new proposals from Conti, as long as they don´t involve retirees´ benefits.
He and Ron Hoover, executive vice president of the USW, charged that Conti said in a letter presented at a bargaining session held March 22 that it has the right to alter retiree benefits when an insurance agreement expires 90 days after the current labor pact´s expiration on April 30.
Conti said it could reach back and collect insurance costs from retirees for some benefits paid during the agreement, the union officials claimed. "These benefits were bought and paid for by retirees during their years of faithful service at Continental," Hoover said. "We will not stand for this and will fight it, in court if necessary."
Holcomb, however, said the "union´s assertions were false and misleading," maintaining that all proposals made by the tire maker since contract sessions began contained proposed changes to retiree benefits.
"Our first proposal, and those thereafter, had retiree benefit clauses in them," he said. "We focused almost entirely on retirement benefits and now they want to protect retiree benefits."
While that issue has been tabled, Holcomb said Conti has not dropped it entirely.
"We reserved the right to bring back any changes," the official said, and company negotiators could address the issue at a later date if talks go nowhere. "We would work through collective bargaining to achieve any changes."
Holcomb charged the USW doesn´t seem to be doing anything to save jobs in Charlotte, but rather seems more concerned with the Steelworkers´ national agenda of job security, benefits and securing manufacturing jobs.
The union repeatedly has claimed Conti doesn´t understand how to operate and compete in the U.S., has flawed business strategies and intends to move most of its manufacturing out of the U.S.
"It´s hard to negotiate with these people," Cieslikowski said. "It´s hard to trust them."
Conti doesn´t care how the two sides come up with $32 million in cost savings, as long as the mark is hit. Otherwise, Conti said in early March, it will suspend tire production indefinitely at the site.
That suspension would go into affect Sept. 15, which would mean 478 hourly and salaried positions would be eliminated.
The plant will remain open with about 200 workers handling rubber mixing, calendering, puncture sealant and warehousing operations.
Conti, which has been negotiating with the USW since October, cut about 140 workers at the Charlotte factory in mid-March.
A second round of layoffs is scheduled for mid-May when 170 employees will be let go. Another 50 salaried positions could be eliminated in July.
With the first round of layoffs completed, Conti trimmed its production at the site to 18,000 tires a day from 25,000. That figure will tumble to 12,000 if the company drops the 170 workers in May.
Conti´s plants in Mexico, Brazil, Europe and Mount Vernon, Ill., are picking up the slack, Holcomb said.