Contract talks between Titan International Inc. and workers at its three U.S. tire plants begin this fall, and the players are confident the company's recent financial success will lead to productive negotiations.
Separate pacts between the tire maker and the hourly work forces represented by the United Steelworkers expire Nov. 19. Titan's farm and off-the-road tire manufacturing sites are in Des Moines, Iowa; Freeport, Ill.; and Bryan, Ohio.
Leaders of the USW locals staffing the Titan plants said they are meeting at the end of the month to discuss contract issues, with formal negotiations likely to start in September or October. Kevin Kirk, president of USW Local 745 in Freeport, said there are many issues to address—job security, health care, wages and benefits among them—but none at this point are bigger than another.
“Our goal is to win a fair contract,” he said.
Kirk also said Titan's performance so far in 2010 is a great sign entering the bargaining stage. “The economy picking up is a good thing for everyone,” he said.
The Quincy, Ill.-based tire and wheel maker posted sales of $229.7 million in the second quarter, with net earnings of $4.6 million. For the first half, the company's sales reached $426.1 million and net profits of $6.6 million.
The positive quarters of 2010 were a big improvement over the final three-month period of 2009, in which Titan had sales of $146.5 million—a 43-percent decline from 2008—and posted a $26.5 million loss. Company sales for 2009 were $727.6 million, down from $1.04 billion in its record 2008 year, with a net loss of $24.6 million.
Mike Mathis, president of Local 164 in Des Moines, said that the good results have been encouraging. There were some short lulls in production during the recent downturn and some layoffs, but generally the plant has been very busy and the laid-off workers were brought back relatively quickly, he said.
The Des Moines plant, traditionally an agricultural tire facility, also makes all-terrain vehicle, lawn and garden, and some large-size OTR tires, Mathis said.
Maurice Taylor Jr., Titan CEO and chairman, said the company's factories are running well, and the improved numbers speak for themselves. He expects the third quarter to be better than last year, and believes the farm side of the business—both tires and wheels—will continue to build during the period.
Revenues in Titan's agricultural segment reached $175.7 million in the second quarter, up 9.6 percent from the like period a year earlier and comprising more than three-quarters of the company's total sales.
The company's purchase of bankrupt Denman Tire Corp.'s assets—about $7.4 million for the Denman name, tire specifications, patents, molds and equipment—this past summer will add more capabilities to Titan's resources, Taylor said. He plans on making announcements on how the Denman brand will be integrated into his company's production in the coming weeks, he said.
“We're laying the groundwork for the future. We've got new products being accepted and more coming.”
As for the upcoming USW talks, Taylor said he's looking forward to them and knows there is always going to be give-and-take. “Our employees aren't fools. They know we pay very good wages and we've been able to create jobs at our plants. I've had my disagreements with the Steelworkers, but they know that I don't get muscled. I'm fair, but I'm not stupid.”
Ups and downs
Titan and the USW have had an up-and-down, sometimes icy relationship over the years, highlighted by the two longest labor strikes in tire industry history at the company's Des Moines and now-defunct Natchez, Miss., farm tire plants from 1998-2001.
The company was able to reach agreements with the Steelworkers when it acquired Goodyear's farm tire business and the Freeport plant in 2005 and in 2006 when it purchased the Bryan OTR facility from Continental Tire North America Inc. At the time of the Freeport contract ratification, Titan also worked out an extension with Local 164, aligning the units' expiration dates.
While the acquisition and contract negotiation periods in 2005-06 were long, relations remained relatively cordial. There have been some bumps in the road over the past four years—including layoffs and some grievances—but there is optimism for the upcoming talks.
“We expect things to go as they usually do,” Mathis said. “The big thing is the company is doing well, and that's good for us.”
Despite their historical differences, Titan and the USW teamed up in 2007 to file an antidumping and countervailing duty petition with the U.S. International Trade Commission claiming that certain OTR tires imported from China were being subsidized and price-dumped in the U.S. The ITC and U.S. Commerce Department in 2008 backed the claim and determined duties should be charged on those tires.
The Titan contracts affect about 1,400 hourly workers at the three sites. Local 745 in Freeport represents about 500—plus 80-90 on layoff, Kirk said; the Des Moines factory has 465-470 production workers; and the Bryan operation has 238 in plant with about 120 on layoff, said John Bowling, unit chairman of USW Local 890.