FAIRLAWN, Ohio—The United Steelworkers and ContiTech North America Inc. have reached a five-year master contract covering four U.S. facilities that will lead to multi-million capital investments at the plants.
The two sides ratified a contract in mid-August that covers 1,100 workers at ContiTech facilities in Marysville and St. Marys, Ohio; Lincoln, Neb.; and Sun Prairie, Wis. The factories make conveyor belting, track, power transmission products and automotive hoses for a variety of markets.
The agreement comes a year before the prior pact expired and will "pave the path for capital investment and greater productivity," according to a statement from Continental A.G., ContiTech's parent firm. The firm said it was satisfied with the contract and "everyone involved worked diligently, constructively and cooperatively to assure that these facilities, along with other ContiTech locations, will continue to provide quality products and services for all customers."
ContiTech declined further comment on the negotiations or its planned capital spending at the rubber goods factories.
But Emil Ramirez, USW District 11 director who helped lead the bargaining for the local unions, said ContiTech requested to reopen the contract a year before its expiration because the firm saw an opportunity to invest $80 million among the four factories. He said the funds won't be divided equally, but will be earmarked for maintenance and productivity improvement, and may depend on the product line being manufactured.
The spending will include purchasing of more efficient equipment, with investments likely to start in early 2018 and occur from 2018-21, according to Ramirez.
The new contract supersedes the final year of the prior pact and expires July 31, 2022, which he said will align the contracts with some of the tire contracts the USW just ratified, including those with Goodyear and Bridgestone.
Ramirez said that three of the four ContiTech locals voted to approve the master contract by a 2-to-1 margin, but the local at Marysville voted against ratification. Under terms of the master agreement, the pact was approved because the majority of the locals that represented a majority of the 1,100 bargaining unit employees voted to ratify.
The USW official did not know the vote total for the Marysville local.
One thing ContiTech wanted in the bargaining was more stability in health care costs, as plans at the four locations were different, Ramirez said. From 2018 forward, he said workers still will be offered a PPO plan, but also may choose from two high-deductible plans with health savings account options.
"It's becoming more common, something more companies are trying to go to," he said.
There also will be changes to pension benefits. Employees hired before Sept. 1, 2017, will continue to receive a defined pension plan, where they get a specific monthly benefit based on a set benefit per month multiplied by number of years of service, Ramirez said.
Those hired after that date, however, will have a 401(k)-type plan, where ContiTech will contribute 2 percent of an employee's salary each year and also match the worker's contribution, up to another 2 percent.
As for wages, the union maintained its cost-of-living-allowance provision, according to Ramirez. There will be no general wage increase in the master contract, but all USW members will receive a ratification bonus of $1,500.
"They wanted to eliminate COLA, but we're keeping it," he said. "It's been a good avenue for us. I don't know where inflation is going to go, but if it does rise up, COLA will continue to pay."
Another provision of the contract allows for ContiTech to offer up to 200 buyouts based on seniority, Ramirez said. The pact calls for up to 90 buyouts at Lincoln, up to 30 at Marysville, 55 at St. Marys and 25 at Sun Prairie.
He added that eligible employees would receive a lump sum based on years of service up to a certain cap. ContiTech was to start making the offers in late August, with workers having a 30-day window to accept the buyouts.
As for guaranteeing the factories remain open, Ramirez said it is difficult to get companies to put that promise in writing. "They are committed to make these investments at these plants," he said, "so we feel pretty good that they're not going to be on the list to close."