AKRON (Feb. 4, 2009) — When negotiators for the United Steelworkers union and the world's largest tire makers commence contract talks later this year, many familiar issues will be on the table.
Job security and plant protection, health care and pensions will be at the fore, just like the last few negotiations. But some of the players in the upcoming talks also believe the current state of the U.S. and global economies adds uncertainty to the process.
Ron Hoover, USW executive vice president in charge of the union's Rubber/Plastics Industry Conference, said the economy probably will complicate talks if things don't improve. Dave Lowe, vice president of employee and labor relations for Michelin North America Inc., added that “the unpredictability of the economy puts a strain on both parties.”
“Whenever economic recovery happens, it will likely be a long-term process,” Lowe said. “For the time being, the market is very difficult to predict.”
Some of the main issues of recent years will be the same for Michelin, which operates three USW-organized BFGoodrich tire plants in the U.S.
For example, health care costs for active employees and retirees continue to increase, and pension funds in general have been impacted by the economic downturn, Lowe said.
The company also is paying close attention to tire demand, making plant flexibility a priority, he said.
Hoover said he feels good about the efficiency of the USW-represented tire facilities and their ability to compete. “Our people are very productive,” he said. “I think we've made huge gains in that area in the last decade.”
In this upcoming round of talks, the USW executive wants to work to minimize what he calls “havoc” on the lower end of the scale with new hires regarding wage levels and fringes. He also has no intention of doing away with cost-of-living allowances that were negotiated more than 30 years ago.
No time for confrontation
David Meyer, associate professor of management at the University of Akron's College of Business Administration, believes there will be a call for some concessions in the upcoming master contracts because of the state of the industry and the economy. However, Meyer also thinks it's a good time for parties on both sides to be reasonable and predicts less difficult negotiations.
That wasn't the case in 2006, when, following the completion of a three-year deal with Michelin, USW members working at 16 Goodyear tire and rubber product sites in the U.S. and Canada went on strike. The workers returned to their jobs in January 2007 after the 86-day walkout.
“These talks should be about preservation,” Meyer said. “This isn't the time to have it out. The workers should live to negotiate another contract in three years and get to a better economy. The tire companies are making low profits, but it's a lot better than losing $1 billion a month.”
While negotiations for the tire industry's Big Three—including Bridgestone Corp.'s unionized U.S. plants—haven't started yet, contracts reached at two of Cooper Tire & Rubber Co.'s factories may impact those to come.
In mid-December, the tire manufacturer reached three-year agreements with the USW-represented work forces in Findlay, Ohio, and Texarkana, Ark. Days later—and also following a low demand-driven capacity study on Cooper's four U.S. tire plants—the company announced it would close its Albany, Ga., facility, a non-union site.
The situation with Cooper was “momentous,” Hoover said, because two un-ion plants in danger of being closed were kept open and the non-union factory was shuttered. “That doesn't happen too often,” he said. “I don't feel good about anyone losing their jobs, but I'm glad we were able to protect our people. Our bargaining committees did a great job under difficult circumstances.”
Looking for better times
The Cooper contracts preserved jobs but also provided no general wage or cost-of-living allowance increases. This is the type of pact Meyer envisions for the master round, where both sides “work together and look for better times in the future.”
Michelin's Lowe said the issues negotiated in the Cooper contracts are ones Michelin and the USW worked to resolve in previous contracts. But he said the company's BFGoodrich unit has its own unique challenges to address when the time comes.
Lowe also said Greenville, S.C.-based Michelin is watching with interest how new U.S. President Barack Obama, his administration and a new U.S. Congress will impact the labor picture in the country.
Meyer said a potential national health care program would likely be the main issue in the next set of negotiations for the tire industry—and many others as well—but that is three to four years out.
“If eventually health care is out of employer-negotiated benefits, it could free up contracts in all sorts of areas,” he said. “They could be talking about wages again.”
Hoover said he's looking forward to the contract discussions this year. “It's times like this that I feel we can really help our members, especially when things are tough.”
Working with the USW is an important component in facing the challenges of the industry, Lowe said. “It is critical to have a constructive relationship with the union based on the realities of the business, both now and in the long term.”
The USW will hold prebargaining policy sessions for the R/PIC March 9-10 in Pittsburgh, Hoover said. The three-year BFG and Bridgestone contracts expire July 18 and Goodyear's lapses July 22.