ST. LOUIS (Sept. 7, 2000)—Bridgestone/Firestone Inc. and the United Steelworkers of America may have averted an unwanted and potentially devastating strike over Labor Day weekend, but time will tell whether the agreement is a good one for either side.
A preliminary look at the tentative three-year contract agreements—which still must be ratified locally—reached for 8,000 unionized workers at nine Bridgestone/Firestone plants indicates favorable wage and pension increases.
These include 65 cents in raises, $1.60 per hour in back cost-of-living allowances and a boost of the pension multiplier by $9 per month for each year of service. The union also received improvements in language covering seniority rules, mandatory overtime and grievance and arbitration procedures.
David Bradley, an analyst with J.P. Morgan Securities, said it looks like a good deal for the union, and one that may have been done cheaper by the company. But with the fallout from Bridgestone/Firestone´s tire recall and pending lawsuits, a lingering labor dispute with the union may have been "pretty disastrous," he said.
Mr. Bradley believes the results of the recall and lawsuits will be damaging but not catastrophic to the company. Both sides compromised to get a deal done, he said.
David Meyer, associate professor of management at the University of Akron´s College of Business Administration, said the company likely wanted to put an end to the labor issue in the midst of its other troubles.
"It would have been fighting a two-front war," he said. "It didn´t want to deal with this front."
Mr. Meyer said he was surprised a strike was averted, given the two sides´ history. Hard feelings are left over from the previous multiplant labor dispute in 1994-96, he said.
The United Rubber Workers union, which merged with the USWA in 1995, struck against the company for 10 months beginning in 1994 and took another 17 months to secure a contract. Bridgestone/Firestone´s use of about 2,300 replacement workers during the dispute only made relations worse, Mr. Meyer said.
This contract also could be a good one for workers getting ready to retire. The pension multiplier´s upgrade to $50 per month per year of service could entice many experienced workers to step down, he said. Many of the big tire companies like Bridgestone/Firestone and Goodyear have a high percentage of workers with 30-plus years in, he said.
The downside for the union is that if the company´s production slips through demand reduction caused by the recall, there could be a large number of layoffs, Mr. Meyer said.
Saul Ludwig, managing director of McDonald Investments Inc. in Cleveland, said there was just as much desire on the part of the union to settle and keep working.
"I believe they felt it wasn´t a time to go on strike and damage the company," he said. "In the event they had to close a plant, do you think the company would choose a union or non-union plant?´´
Bridgestone/Firestone has two U.S. non-union tire plants—in Aiken County, S.C., and Wilson, N.C.
The USWA—pending ratification of these Bridgestone/Firestone contracts—now will turn to the other tire companies for contract negotiations. Bargaining with Goodyear and Michelin North America Inc. was suspended in the spring after Bridgestone/Firestone was selected as the target company for pattern bargaining.
Goodyear and the USWA are scheduled to return to the table for mid-contract reopeners in Cincinnati Sept. 13, a company spokesman said.
Mr. Meyer said the other tire companies may not be happy to follow the pattern set with Bridgestone/Firestone because of the substantial raises, but there are potential profit and market share increases available for Goodyear and Michelin via the recall.
"(The Bridgestone/Firestone) deal isn´t cheap, but those companies might have the money to match it," he said.
Other negotiations on the USWA´s 2000 docket concern workers at Cooper Tire & Rubber Co.´s Findlay, Ohio, plant; Yokohama Tire Corp.´s Salem, Va., facility; and Pirelli Tire North America´s Hanford, Calif., tire factory.