Plants reach labor peace as workers ratify contract

TUSCALOOSA, Ala.—There will be labor peace at two Michelin/BFGoodrich plants for another three years.

The United Steelworkers union ratified a master contract by a vote of 1,034 to 741, establishing a new labor agreement through July 27, 2019, with facilities represented by Local 351 in Tuscaloosa, Ala., and Local 715 in Fort Wayne, Ind.

Michelin and the union reached the agreement Aug. 2, and voting was finalized Aug. 17, according to a summary posted on Local 351's website. The USW described the deal as “fair and equitable” in its summary.

Michelin said in an emailed statement that it is “pleased this agreement was reached in a very challenging market environment,” adding that the contract covers about 2,400 employees spanning both facilities.

“We believe this is a fair contract for our employees and are pleased at the very professional way negotiations were handled,” a Michelin spokesman said in an email. “Looking forward, we think this positions these plants well to compete in an international marketplace.”

The policy brings about the first general wage increase at the facilities in 16 years and only the second since COLA was implemented more than 40 years ago, according to Local 351's summary

Level 1 and 2 new tier employees will receive a $1 per hour increase in the first pay period following ratification, according to the summary. All new Tier Level 3, 4, 5 and technical maintenance will receive a 95 cents per hour increase spread out over the life of the contract—30 cents per hour in the first pay period following ratification, another 30 cents per hour in the first pay period of August 2017 and 35 cents per hour in the first pay period of August 2018.

“We all know cost of living allowances have been relatively flat for some time,” said Stan Johnson, USW international secretary treasurer. “We thought it was a good time to negotiate a GWI. COLA traditionally performs strongly in a strong economy. As we've had a flatter economic curve since 2008 and 2009, we thought it was appropriate to propose and negotiate a general wage increase in addition to improving the COLA.

“With the wage increases that are going in, we think we will have closed the gap on at least the three highest tiers by or before the end of the agreement, which will take the inequity in pay rates back out of that system.”

While as a whole the union accepted the contract, there was a split between the plants.

A majority of the Tuscaloosa membership voted for the agreement, 595 to 265. However, the majority of membership at Fort Wayne voted against the agreement, 476 to 439 with three votes voided.

Johnson said the issues Fort Wayne had weren't with the contract itself, rather with the state of the relationship between the union and management at the facility. He stressed the union will work toward getting those issues resolved as it moves forward with the agreement.

“I think too much is going to be made of the fact that Fort Wayne voted the agreement down by a small margin and that Tuscaloosa voted the agreement up by a large margin,” Johnson said. “The fact of the matter is these two plants operate together as a unit. There had been some frustration building within the bargaining unit in Fort Wayne as to the atmosphere of labor relations. I think that's what you saw. I don't think it was a dissatisfaction with the agreement.”

Local 715 had a strike vote posted on its website, scheduled for June 28 and 29, to give the executive board authority to call a strike if necessary to receive a satisfactory settlement on a master and supplemental contract.

“This was a master agreement,” Johnson said. “If we would have had a strike, we would have had a strike in both sites simultaneously. I didn't foresee a circumstance where Fort Wayne would be on strike and Tuscaloosa would not. It was a tough negotiation. Anything is possible up until the point in time that you reach resolution.”

Michelin agreed to renew the plant security side letter from the 2009 contract, which Johnson said ensures that the two facilities will operate throughout the life of the agreement.

The USW stopped Michelin from forcing the remaining grandfathered employees working in Level 1 and 2 jobs out of those positions over the course of the next three years and from contracting out certain jobs. According to a summary posted on the local unions' websites, Michelin wanted the work done in the warehouse in Fort Wayne and the remaining cleaners in both plants to be contracted out by the end of the contract.

Once the union rejected that proposal, the summary stated that Michelin shifted to forcing remaining grandfathered employees working in Level 1 and 2 jobs out of those positions over the life of the contract.

“We didn't sacrifice any jobs, which has been a position many companies in a lot of sectors have tried to work toward outside contracting,” Johnson said. “We certainly staved that off.”

The union also was successful in getting Michelin to agree to auto enrolling new hires into their 401k plan at 2 percent, and all members can increase or decrease contributions. The defined contribution plan increased by 4 cents across all six age plus service brackets. In addition to the increase, all employees who are on the rolls as of Sept. 1 each year of the contract will receive a $500 contribution to their defined contribution account.

Other highlights from the summary include:

• COLA will continue to have a guaranteed minimum and maximum during the life of the contract, set at 0.5 percent and 3 percent;
• All new tier employees whose wages have caught up to the grandfathered wages along with technical maintenance employees will have COLA increases incorporated for the life of the agreement;
• Contract language has been corrected to ensure employees are credited properly when determining employer contributions for a participant who is suspended; and
• Despite escalating health care costs, the summary outlined that the union was able to maintain lower premiums than competitors.

“The cost of health care went up, but the cost of health care went up proportionally to the overall cost,” Johnson said. “It was not unfairly burdened upon the employees. It was a joint circumstance where just the cost of health care increased, and therefore the cost for both parties increased. I don't view that as concessionary; I view that as dealing with the reality of the circumstance that we're the only nation in the industrialized world that doesn't have a national health care policy.”

In 2013, the union negotiated master agreements for all three major tire makers in the same summer. The three agreements with Goodyear, Michelin and Bridgestone Americas Inc. were set to expire in July of 2017, but the Michelin contract contained an opt-out clause for 2016.

“It's hard to say that this agreement sets the foundation for the next cycle for Goodyear and Bridgestone/Firestone,” Johnson said. “Certainly if we're in the same set of economic circumstances and both companies are profitable, we might look to improve upon the agreement we got with BFGoodrich. It really all depends on the environment at the time in which you go into bargaining.”