AKRON-Master contract negotiations in the tire industry are not scheduled to begin until next April, but company and union officials already have made several opening moves that may signal a nasty turn in labor-management relations, officials say. Goodyear recently tried to re-open its master contract with union workers at its St. Marys, Ohio, plant. The company gave the union an ultimatum: Accept certain concessions or we'll move your jobs to lower-cost facilities.
The United Steelworkers of America's Goodyear policy committee rejected the proposed changes Oct. 4.
Union officials and analysts said Goodyear is sending a clear message with St. Marys: ``We're coming after you next April.''
The union's reply is just as bold: ``We're not going to just sit here and take it.''
Goodyear's recent threat to cut production at its Green, Ohio, air springs plant if workers don't agree to halve their wages is another telltale sign, said John Sellers, executive vice president of the USWA Rubber/Plastics Industry Conference.
The company said its plans in St. Marys and Green are business decisions completely separate from master negotiations.
Goodyear isn't alone in seeking to lower its labor costs. The other tire makers involved in master bargaining-Bridgestone/Firestone Inc. and Michelin North America-forced concessions on their union workers just before or during the last round of talks in 1994.
Firms outside the master contract-including Continental General Tire, Yokohama Tire Corp. and Titan Tire Corp.-don't operate in a vacuum. They try to match the majors in concessions, Mr. Sellers said. Conti General, for example, plans to lay off 100 in Mayfield, Ky., after workers there rejected concessions.
Most company officials said they need the contract changes for their North American plants to be competitive.
They point to Bridgestone/Firestone, saying the tire maker broke the pattern settlement set in '94. BFS is paying its union workers between $1.50 and $2 less an hour than most of its competitors and has significantly lower costs on the benefits side, officials said.
``That's the real seriousness of the changes (Bridgestone/Firestone) forced on its workers,'' said Mike Stone, United Rubber Workers president from 1981 to 1990. ``It was just a matter of time before the others came after the union.
``I don't think we've ever had anything quite this bad happen to us before,'' he said.
In the past, Goodyear and the union have had an excellent working relationship, Mr. Sellers said. However, recent events have strained their relations.
``St. Marys and Green don't help matters and they've got to be dealt with, but (our relationship with Goodyear) isn't beyond repair,'' Mr. Sellers said. ``We're going to take the high road as much as we can. We're certainly not painting this as a war yet.''
St. Marys isn't a big tire local in the Goodyear master contract chain, but it's playing a pivotal role in the talks. Goodyear and the union are using the plant as a pawn to feel out each others' strategy, said Dave Meyer, a University of Akron management professor who follows the tire industry.
``These are the beginning moves in the chess game, and both sides have made some fairly aggressive openings,'' he said. ``If this continues, it's going to be a fast and bloody game. If we're still seeing these moves in February, it will be a war-but not one throughout the industry. This one will be at Goodyear.''
Mr. Sellers confirmed the union is prepared to fight long and hard to protect members' wages and benefits.
``To say `enough is enough' just doesn't say it all,'' he said. ``It's critical that we don't give in, because once you do, it just never stops. It just promotes a feeding frenzy among the companies.''
Goodyear employs more Steelworkers than any other firm, raising the ante in both numbers and visibility. The membership is tired of ``going backward'' while companies, their leaders and stockholders line their pockets with cash, union officials said.
``Goodyear has had 22 straight quarters of improved profits, yet they come to us for concessions,'' said Mickey Williams, president of USWA Local 12, which staffs Goodyear's Gadsden, Ala., factory.
Still, U.S. tire plants must reduce their labor costs and increase productivity to compete with facilities worldwide, said Harry Millis, an analyst with Fundamental Research Inc.
Tire price increases aren't sticking often, and the development of 80,000-mile tires is cutting into demand, further escalating pricing wars, Mr. Millis said.
``Tire makers obviously aren't going to get improved margins through pricing,'' he said. ``It will have to be through lower costs.''
In addition, the currency exchange rate advantage that U.S. plants have enjoyed the past few years is evaporating as the U.S. dollar strengthens, Mr. Millis said. Companies are opening tire plants around the world and becoming more adept at shifting production to lower-cost facilities, he said.
U.S. union workers must relinquish inefficient work rules and accept changes that optimize their employers' flexibility or accept the alternative: lose jobs overseas, Mr. Millis said. Maintaining a standard of living doesn't mean much if it costs you your job, he added.
``I think the message Goodyear and the others are sending is: `Don't expect a big, fat, juicy contract, because we're not in a position to do it. Any modest gains in wages and benefits will have to be offset with work rule changes and improved flexibility,'*'' Mr. Millis said.
But don't expect the union simply to submit to the companies' demands, said Professor Meyer.
Next year's negotiations mark a critical time for the labor movement. Union officials must fight to preserve everything they've attained the past 60 years, he said.
``If the Steelworkers draw the line, it's going to be an extremely ugly battle,'' Mr. Meyer said.