Several tire manufacturers are taking a hard line this year in negotiations with the United Rubber Workers. While the union has settled with Goodyear and Michelin North America, it has struck three others-Bridgestone/Firestone Inc., Pirelli Armstrong Tire Corp. and Dunlop Tire Corp. Following are some thoughts on what these strikes might mean:
Collectively, the strikes, with 7,500 tire workers off the job, constitute the largest such work stoppage in North America since 1976, when an industry-wide action idled tire plants for four months.
Independent tire dealers are probably in a better position to weather any strike-caused product shortages today than a few years ago because they tend to carry more than one tire brand in their stores. Should supplies tighten for a certain line, dealers can more easily switch to a similar tire made by another tire maker.
That was not the case 20 years ago, when dealerships were more closely aligned with a single tire supplier and brand, and loyalties between dealers and manufacturers ran deeper. Only if the strikes are prolonged are dealers now likely to be strongly impacted.
Profitability-or lack of it-seems to be the driving force behind the strikes. The three tire makers affected all need to reduce costs and shore up their bottom lines.
As analyst Scott Soffen of Lehman Brothers observed, tire makers ``should be squeezing out more productivity from the workers they have.''
Both sides-managements and the union-appear resolved to carry out a prolonged strike, if need be. Having sustained significant losses during the past few years, strike-affected tire makers will want a settlement that helps them return their operations to the black.
Union leaders have balked at the position taken by the tire makers claiming, in the case of Bridgestone/Firestone, that ``the company wants to reinvent the entire contract,'' according to URW Organizational Director John Sellers.
Such staunch and opposite positions indicate the strikes will be difficult to settle.