(From the March 5, 2012, issue of Rubber & Plastics News)
FINDLAY, Ohio—Unionized workers at Cooper Tire & Rubber Co.'s Findlay tire plant ratified a new five-year labor pact Feb. 27, bringing an end to a lockout that began Nov. 28.
The agreement—approved by a 627 to 321 margin—affects about 1,050 United Steelworkers Local 207L members at the factory.
The vote was the final action in a three-month saga that began when USW members at the Findlay plant overwhelmingly turned down an earlier tentative agreement. Cooper responded by locking out the union work force the Monday after Thanksgiving.
The Findlay-based tire maker absorbed as much as $40 million in increased costs during the labor dispute, bringing in temporary workers to produce an undisclosed number of tires at the facility, the company revealed in its 2011 financial results review.
“While enormous time and effort was involved in reaching this labor agreement, leaders from the company and the union share a belief that the new contract will enhance the competitiveness of Cooper's Findlay tire plant through improvements in productivity,” Cooper said in a press release.
USW officials said the agreement “is the very best we could do without risking further financial harm to our families, community and our customers that we need to keep the plant thriving and prosperous.”
Local 207L's bargaining position was hurt in late January when USW Local 752L at Cooper's tire plant in Texarkana approved a new four-year pact by a 1,006 to 141 vote. During mid-February, Cooper also reached new contracts with USW Local 556L at its tube factory in Clarksdale, Miss., and Teamsters Local 20 covering fleet truck drivers at the Findlay operation.
Local 207L President Rodney Nelson said throughout the contract battle the local's members remained united. “Our brothers and sisters have once again made their voices heard,” Nelson said. “As a committee, we are proud to have remained united and delivered a fair contract, despite Cooper's best attempts to divide us.”
The majority of the workers at the Findlay tire plant won't receive a general wage increase. Those hired before 2009 receive lump sum payments of $800 during the first three years of the pact, with payments in 2015-16 determined by inflation rates, according to a summary of the pact posted on the Local 207L website. Those hired after Jan. 1, 2009, get $1,200 lump sum payments the first two years and hourly wage increases the final three years of 10 cents, 15 cents and 20 cents.
The pact continues a two-tier wage system at the factory. Those hired after Jan. 1, 2009, will start at 70 percent of pay and work their way up to 85 percent of the full rate after 30 months, the summary said. Previously, new hires topped out at 80 percent.
Those hired before 2009 will continue on the defined pension plan, but will receive no increase in the monthly pension multiplier formula. For newer hires, Cooper will contribute 3 percent of pay into a retirement account for each worker.
Vacations will remain at a maximum of six weeks for current employees, with those hired after Feb. 1, 2012, topping out at five weeks, according to the agreement.
Cooper did give up its plan from the first tentative agreement for productivity bonuses that would not be specified until after the contract was approved, the union said. The firm also relented on its plan to re-evaluate the pay rate for many job classifications, with the new agreement stating only six categories that will be adjusted.
During its fiscal 2011 results review the final week of February, Cooper said its efforts to keep dealers supplied with tires during the 11-week lockout could result in $40 million or more in increased costs.
Commenting on the tire maker's lockout, Cooper CEO Roy Armes said: “Our priority during the lockout has been to protect the supply of tires to our customers. In order to do this, we will incur premium costs during the first quarter, which include additional overtime, the costs of mobilizing and training a temporary work force, and operating below capacity during the quarter.”
These costs potentially could be as high as $30 million in the first quarter, he said, and would be in addition to $11 million in costs the company booked in the fourth quarter.
The company spent $3 million to mobilize and train a temporary work force at the plant after it locked out the more than 1,000 members of Local 207L. The lockout resulted in the plant being idled for 14 days, followed by a period of weeks during which Cooper increased production as the temporary work force trained on Cooper's manufacturing and quality systems. Those efforts led to $8 million of unabsorbed overhead costs, the company said.
Cooper did not disclose the number of temporary workers hired nor what will happen to them now that the union ratified a new contract.
Despite the higher costs in the three-month period, Cooper expects its first quarter operating profits to be similar to the first quarter of 2011.
NLRB case to continue
The union said in a statement that unlawful bargaining charges it filed against Cooper with the National Labor Relations Board will continue to be processed.
“It remains our position that the lockout was unlawful because of multiple unfair labor practices committed by the company and that pursuant to the required NLRB remedy for an unlawful lockout, the company must make the locked-out workers whole for all lost wages and benefits,” the USW said. “The NLRB has not yet decided if our charges have merit. If it does, the NLRB will start the litigation process by issuing a complaint against the company.”
The USW filed the unfair labor practice charges against Cooper shortly after the lockout began. If upheld, they could trigger a back-pay liability for any time the NLRB determines the lockout was illegal. The union said the litigation process may take months or years to complete.
“Breaking federal labor laws, importing a temporary work force and demanding unfair and unreasonable wage and benefit cuts instead of negotiating in good faith are not the actions of a responsible corporate citizen,” Dave McCall, USW District 1 director, said after the ratification vote.
Tire Business contributed to this report.