AKRON—Labor leaders see turbulent seas ahead, although two analysts believe the union's pact with Bridgestone/Firestone Inc. paves the way for calm contract talks. The United Steelworkers of America in December ratified a master contract with BFS, ending a nearly 2 1/2-year dispute.
The settlement, which covers about 6,000 union members, takes tremendous pressure off negotiators for the Steelworkers and rival tire companies, analysts said.
``I think there will be a spirit of cooperation in light of the settlement with Bridgestone/Firestone,'' said Saul Ludwig, a managing director with McDonald & Co. Securities Inc. ``I do not anticipate a strike.''
Harry Millis, an analyst with Fundamental Research Inc., concurred.
``Until the surprise settlement with Bridgestone/Firestone, I was nervous,'' Mr. Millis said. ``I may be an optimist on this, but I think negotiations should progress rather smoothly.
``The wild card is the United Rubber Workers' (1995) merger with the USWA. The Steelworkers have deeper pockets, which could cause a volatile situation.''
The URW benefited greatly from the merger, said John Sellers, executive vice president of the USWA Rubber/Plastics Industry Conference.
``There's no doubt about it: We're negotiating from a position of greater strength,'' he said. ``We're not approaching this from a `strike 'em' attitude. It's really more of an insurance against a strike. But we're prepared to get into a fight if we have to.''
Is it the pattern?
Company and union officials haven't even sat across from one another at the table yet, and already they appear to be at odds on a major issue.
The two sides are divided on whether or not the BFS settlement is the pattern for upcoming master contract talks.
The BFS accord must be the blueprint for the negotiations if both sides hope to retain some semblance of serenity, Mr. Millis said.
Other tire makers continually have said BFS's package places them at a ``competitive disadvantage,'' and they need changes to offset this. However, labor leaders are determined to forge a new pattern in April.
``The Bridgestone/Firestone settlement is not the pattern,'' Mr. Sellers said.
Local union officials agreed.
The union must stop the other tire makers from trying to match the BFS package, said Romey Holmes, president of USWA Local 665, which staffs Continental General Tire Inc.'s Mayfield, Ky., facility.
``If the companies try and go after things similar to those in the Bridgestone/Firestone settlement, there's no doubt there will be a strike,'' said Sonny Milton, president of USWA Local 703, which staffs Pirelli Armstrong Tire Corp.'s Hanford, Calif., factory.
``Bridgestone/Firestone didn't get everything it wanted, but it did get a lot,'' Mr. Holmes said. ``I think the other companies will be looking for the same things Bridgestone/Firestone got, but I hope I'm wrong.''
Mr. Sellers concurred.
``Everybody on the inside knew that (concessions made in) 1993 and 1994 would have implications in 1997,'' Mr. Sellers said. ``We did restore most of what we had at Bridgestone/Firestone, but I'm sure there still will be some cherry-picking attempts.''
Concessions disembowel the industry and must be rejected at all levels, Mr. Sellers said. However, the union's strong stance has had its costs.
Goodyear late last year announced plans to shift production from St. Marys and Green, Ohio—affecting up to 500 union jobs there—after the USWA rejected concessions. Mr. Holmes' co-workers recently rejected proposed give-backs, and Conti General followed by unveiling a scheme to lay off 650 workers in Mayfield by year's end.
``I expect a tough round of bargaining,'' Mr. Sellers said. ``I think everybody from both sides does.''
The pivotal players
Goodyear and Uniroyal Goodrich Tire Co. aren't saying much about upcoming master contract talks.
``Goodyear's primary goal in 1997 master contract negotiations is to reach a settlement that is fair for associates, customers and shareholders,'' according to the company's statement.
Mr. Sellers and local union officials said Goodyear changed its course with its actions in St. Marys and Green. Goodyear maintains the actions were business decisions. However, Mr. Sellers said the moves are a sign of changing times.
``Goodyear took the high road in 1994, but there are signs they may be taking another route,'' Mr. Sellers said. ``I'm still very hopeful we can work things out in Green and St. Marys. I'm just disappointed in the company's approach.''
Uniroyal Goodrich declined to discuss upcoming talks, but Mr. Sellers and local union officials are on-guard.
``Michelin started all of this back in 1993 and '94 when they went plant to plant and demanded concessions,'' Mr. Sellers said. ``So, we're certainly not going to approach those negotiations in a complacent manner.
``They already (in early 1995) asked for a one-year extension of the current contract, but (we) wouldn't consider it,'' he said. ``Certainly the firm's recent retiree benefit cuts will be an issue.''
Master contract talks affect the smaller firms differently.
Conti General follows the master closely, Mr. Holmes said. Cooper Tire & Rubber Co. and Titan Tire Corp. said their firms go their own way.
``We don't follow those big oar boats,'' said Maurice Taylor Jr., CEO and chairman of Titan Tire parent Titan Wheel International Inc. ``We're going our own way in a cigarette (speed boat), and if we get there first, the wine, women and song are ours.''
If the union's looking for major wage and benefit improvements, they're sadly mistaken, according to Mr. Millis.
Tire makers can't endure more than a 2-to 3-percent annual hike in wage and benefits costs because the U.S. tire market has remained stagnant since 1995, he said.
Margins aren't getting better, and the favorable currency exchange rate of the past two years has diminished due to a strengthened U.S. dollar, according to Mr. Millis.
The industry has reached a fork in the road, said Mike Stone, who served as URW president from 1981-1990.
Mr. Stone advised negotiators to take a road less traveled: ``Recognize each others' problems and try to work together to solve them.''