PITTSBURGH-Master contract bargaining between the U.S.´s major tire makers and the United Steelworkers union have begun, and early indications are they won´t be a cakewalk.
Negotiators for the USW and Michelin North America Inc.´s BFGoodrich tire manufacturing unit met for the first time June 8 in Knoxville, Tenn. Representatives for Goodyear and the union began talks June 9 in Cincinnati, and Bridgestone/Firestone and the USW opened discussions June 14 in St. Louis.
The union said the initial information exchanges with Goodyear show "huge differences" in expectations for the 2006 round of bargaining. No proposals had been traded between bargaining committees in the BFG or BFS negotiations as of press time.
Goodyear´s proposals, according to a USW Web site, include a change in job security and plant protection from the 2003 contract, which expires July 22. In the new offer, tire factories in Gadsden, Ala., Union City, Tenn., and Tyler, Texas, would not have protection from closure during the life of the contract.
The Tyler plant received only partial protection from closure during the current contract, but the Gadsden and Union City sites had full protection. Goodyear shut down its Huntsville, Ala., tire plant at the end of 2003.
Those three factories also could be affected by Goodyear´s decision to reduce its North American production of private label tires. The company announced June 21 that during the next 12 months it will cut production of up to 10 private label brands representing about $300 million in annual sales to focus on more profitable segments of its business.
In addition to the Gadsden, Union City, and Tyler sites, Goodyear´s Fayetteville, N.C., and Valleyfield, Quebec, tire plants could face cuts. The Fayetteville workers are covered in the master contract, and the USW also represents workers in Valleyfield.
The Goodyear proposals included reduced job protection in Akron and other union plants; the elimination of the hourly cost-of-living allowance; reduced job-wage rates via a six-tier wage scale; outsourcing for production and maintenance work; and the elimination of seniority rights for layoffs, recalls and job bidding, the USW said.
Kevin Johnsen, a former member of USW Local 915 in Huntsville and now the union´s Goodyear negotiations coordinator, said the two sides had a "long way to go" to reach an agreement acceptable to members and retirees. He said the union sacrificed in 2003 negotiations to help the company recover from its financial problems and expects with Goodyear´s return to profitability a "fair and equitable" contract.
"These company proposals are anything but that," Johnsen said.
A Goodyear spokesman said the firm won´t address comments from the USW. However, in remarks to negotiators during the first day of talks, Jonathan Rich, president of Goodyear North American Tire, said while it´s true the tire maker has stabilized and made progress in regaining profitability, it is "not sufficient to sustain the investment the business needs for growth."
Rich said that the company must have a "significantly lower cost structure in North America" and the highest productivity in the world to succeed. He also said Goodyear in the future "cannot afford to be the primary provider of retirement health care," and there has to be a change in the model for post-retirement health care benefits.
"Getting a labor agreement only provides the opportunity to achieve productivity; it does not actually accomplish it," Rich said. "If we are to win in North America, every Goodyear associate-management, salaried and hourly employees-must be dedicated to that goal. We must have the best-trained, most-engaged work force in the world.
The Goodyear master contract covers about 12,600 employees at 12 tire and rubber product plants in the U.S.
In the BFS talks, the two sides planned to exchange proposals June 21. On June 14, the tire maker made an initial oral presentation outlining its proposals, and the union said the tone of the presentation was "extremely negative."
"We made it clear that our goal was to achieve an equitable settlement without a strike," the union´s BFS policy committee said in a letter to members. "We did, however, make it clear that we would not shy away from a fight if it is necessary to protect our members´ and retirees´ benefits."
A BFS spokesman said a more accurate term for the company´s presentation was "realistic." U.S. manufacturers are facing many tough challenges, including rising health care and production costs and low-cost competition, he said.
"We´re trying to be honest and work toward finding solutions to these problems," the spokesman said. "We need to get a contract that´s in the interest of both sides that allows our business to be successful."
Agreements between BFS and the USW include a master contract covering six tire and rubber product plants and separate deals with workers at the company´s Bloomington, Ill., and Warren County, Tenn., tire facilities.
The pacts expire July 23 and cover about 6,000 workers. However, one of the plants covered by the master agreement, BFS´ Oklahoma City tire factory, is in danger of closing by the end of the year.
The firm announced in April it may shut down the 37-year-old facility because of "global market forces"-particularly competition abroad utilizing low-cost production. BFS said at the time it would be "extremely difficult, if not impossible" to make the site competitive again.
The USW/BFG contract, which expires July 22, covers about 3,400 employees at three plants. The union was scheduled to present its initial proposals to BFG negotiators on June 21, a USW spokesman said.