FREEPORT, Ill.—The United Steelworkers union, unhappy with the layoffs made in the last month by Titan International Inc. at its Freeport farm tire plant, is taking the case to arbitration.
Titan laid off 72 workers at the facility-21 on July 31 and 51 more on Aug. 15, according to Steve Vanderheyden, president of USW Local 745, which represents the hourly work force in Freeport. The company said the layoffs were related to a decision by Goodyear to stop buying rubber stock and cut drastically its purchases of all-terrain vehicle tires from the plant.
Goodyear sold the factory and its farm tire business to Titan at the end of 2005.
While the contract between Titan and Local 745 ratified in December restricts layoffs for its first two years, an exception to the rule is work attributable to direct sales to Goodyear, Vanderheyden said. The plant-which includes more than 700 hourly workers and about 70 non-union employees-has a "small portion" of employees assigned to those positions, he said.
As long as the Goodyear work is being phased out-Vanderheyden said Good-year has not confirmed this with the union yet-the layoffs are legitimate, but the union claims Titan did not follow the process outlined in the contract. He also believes the number of people laid off is too many for the work being lost.
Prior to layoffs taking place, management must supply the union with a plan that documents the need for the cuts, their impact and efforts to minimize the number of people affected. After the company issued a plan July 21 that demanded 75 layoffs, the USW took some time to evaluate it before responding.
But on July 28, Titan requested volunteers for layoff and 21 workers responded. They were laid off effective July 31.
Vanderheyden said the company violated the terms of the contract by initiating the first layoff prior to the union getting the opportunity to respond to the plan. Local 745 did respond on Aug. 2, saying a "substantially smaller" number of people than 75 were directly related to Goodyear sales.
Titan came back Aug. 8 with a revised plan, which reduced the total layoffs to 72, Vanderheyden said. The union again said it would respond, this time on Aug. 15. But that morning, the company gave layoff notices to 51 more people, saying they would be gone by the end of their shift but would receive pay for three days.
Vanderheyden said the company has to follow the correct procedure, even if eventually it gets its way. And he claims the tire and wheel maker didn´t address the minimization of layoffs or see if alternative work can be provided to the laid-off employees. "They have to go through the process, no matter how it works out," he said.
Maurice Taylor Jr., Titan chairman and CEO, said as long as the contract terms are met, the layoffs can be made at the company´s discretion. He also believes that for the amount of sales being generated at the Freeport site, the company has been carrying too many employees; 500 is a good target number as long as sales remain constant, he said.
But Titan has plans to expand in Freeport, especially with the addition of capacity from the recent purchase of the former Continental Tire North America Inc. plant in Bryan, Ohio. Taylor believes sales will rise in Freeport, and that means laid-off workers could be called back.
Vanderheyden said the complaint over the layoffs falls under a "special arbitration" category, which means it should be expedited faster than other grievances. He´s still trying to finalize the date with the panel of arbitrators and Titan, but expects the case to be heard in September or October.
He also isn´t revealing the number of layoffs the union is proposing until he gets the hearing date set, Vanderheyden said.
The arbitration procedure will be similar to the one used in Major League Baseball, where the arbitrator chooses between two plans, with one submitted by each party, he said.
Goodyear chose not to comment on the Freeport situation.