PITTSBURGH—A move to cap Continental Tire North America Inc.´s contribution to the health care package for United Steelworkers retirees and dependents could land the company in court in 2007.
The USW filed a class-action lawsuit against Conti on behalf of the union´s retirees alleging the tire maker breached agreements promising lifetime insurance coverage. The company is shifting a large portion of retiree medical coverage costs from the firm to former employees and surviving spouses on various dates in 2007, the union said.
The lawsuit was filed Dec. 13 in U.S. District Court for the Northern District of Ohio, but was not disclosed by the union until Dec. 21. The USW is seeking a declaration that retirees´ benefits cannot be modified or terminated by the company as well as an injunction against changes, and damages.
Rick Holcomb, Conti´s legal counsel, said the union is mischaracterizing the Charlotte, N.C.-headquartered company´s actions along with past negotiations between the firm and the union in which he maintained the USW recognized Conti´s right to alter plan designs.
"We´re merely altering the plan design and implementing some (company) contribution caps," he said, adding that the firm is not terminating retiree medical benefits.
He said a cap has been put in place for former workers at the Charlotte plant and other retirees´ benefits would be capped April 1.
The company is still in negotiations with workers on a number of issues, including health care benefits, so the caps could change or be eliminated in the future, he indicated.
Conti retirees claim their rights to receive medical benefits were earned and vested over years of service at Continental tire plants, including those in Charlotte; Mayfield, Ky.; and Bryan, Ohio.
The medical benefits package was obtained through collective bargaining between Conti and the USW, the retirees maintained, adding the agreement promised lifetime medical coverage.
Tire manufacturing at the Charlotte facility ended in July and the Bryan factory was sold to Quincy, Ill.-based Titan International Inc. that month. The Mayfield plant stopped making tires in December 2004.
Retirees need the health care insurance but they really can´t afford to pay the new rates being implemented by Conti, said Mark Cieslikowski, president of Local 850, which represents workers at the Charlotte plant. "These are drastic increases. Some premiums are up to $1,600 a month. They have to have the insurance because of preexisting conditions (health problems). So they have to accept Conti´s insurance, yet they can´t afford it."