Independent tire dealers, wholesalers and everyone else who sells or distributes tires should pay careful attention to the maneuvering now taking place between several U.S. tire makers and the United Steelworkers of America. The outcome of the upcoming master contract negotiations, which are set to begin in April, will shape the re-tail tire environment for the coming year and beyond.
If the talks turn nasty, and indications are they could, dealers and wholesalers may face product shortages, should the union decide to strike.
Much of the master contract posturing taking place has been between Goodyear and the union, which have had an excellent working relationship in the past. Goodyear employs the largest number of USWA members, making the outcome of its negotiations with the union especially significant.
But two other tire makers, Yokohama Tire Corp. and Continental General Tire Inc., which are not part of the master bargaining, also have asked the union for contract changes recently.
These manufacturers are seeking concessions to lower their labor costs and boost productivity, while the USWA wants to protect members' wages and benefits, according to union officials.
The conflict is obvious.
In addition, the union, still smarting from the tentatively settled 28-month dispute with Bridgestone/Firestone Inc., is looking to regain its strength of yesteryear.
It's strategy is to: return and stick to a pattern settlement starting next year; bring more union locals into the fold for master contract talks; and align labor pact expiration dates within companies and, ultimately, the industry as a whole.
Achieving these goals, particularly the common expiration dates, would give the union real power over the tire makers—a situation that's not apt to occur without a major fight.
With the profitability of most tire makers woefully weak, a labor confrontation appears likely.