ST. LOUIS—For unionized rubber workers at some Bridgestone/Firestone Inc. (BFS) factories, Labor Day truly lived up to its name.
At about 2:30 a.m. Sept. 4, negotiators for the tire maker and the United Steelworkers of America (USWA) reached three-year tentative agreements on contracts covering about 8,000 union members at nine of the company's plants.
The pacts—which will be sent to locals for ratification votes over the next two weeks—may prevent a strike that further would have injured a company reeling from a massive 6.5-million-tire recall, a growing number of lawsuits and overwhelming negative publicity.
Facing a contract extension deadline and strike threat at midnight Sept. 1, the two sides had decided to keep working through the weekend because they had made substantial progress. Then, after around-the-clock bargaining, the tentative pact was reached.
"From the beginning of negotiations, a major priority of the Steelworkers was to get a contract without a work stoppage, and that was accomplished," a USWA spokesman said. "We think it's a fair agreement."
The two sides had been negotiating since March. Union members were working without contracts, all of which expired earlier this year. The union gave a two-week extension termination notice Aug. 18.
Three separate contracts will be sent to members for ratification votes. The master agreement will include Local 7 in Akron; Local 713 in Decatur, Ill.; Local 310 in Des Moines, Iowa; Local 138 in Noblesville, Ind.; Local 998 in Oklahoma City; Local 884 in Russellville, Ark.; and Local 1055 in LaVergne, Tenn.
Local 1055 previously had a separate contract with BFS. Local 1155 in Warren County, Tenn., and Local 787 in Bloomington, Ill., will continue to have their own deals with the company.
All three agreements, if ratified, will run through April 23, 2003.
BFS believes the proposal was "competitive and fair," a company spokeswoman said, adding that the agreements required compromise between the two sides—but not at the expense of product quality.
While the USWA did not want to detail too much of the pacts before ratification, union sources did confirm wage and pension increases, cost-of-living adjustments, improvements in seniority and attendance guidelines, and grievance and arbitration procedures. Mandatory overtime also was removed from the table by the company, the USWA spokesman said.
Union members—who earn between $9 and $19 per hour, depending on experience—will receive a 20-cents-per-hour raise upon ratification; another 20 cents on Sept. 1 of next year; and another 25 cents per hour Sept. 1, 2002. The members also will receive a $1.60 raise in October for back COLA (cost-of-living allowances) wages, which had been tied to unattained production.
Further quarterly COLA payments will not be connected to production goals, said Randy Gordon, vice president of Local 713 in Decatur.
The pension multiplier also will be raised to $50 per month per year of service from the current industry standard of $41 per month per year of service. For a 30-year worker, that's a retirement benefit increase to $1,500 per month from $1,230 per month.
While the plants will remain on continuous production schedules, with workers on 12-hour shifts, union members also will return to a rotation of three-day weekends every other weekend, Mr. Gordon said. Holiday shifts no longer will be mandatory, but will be voluntary at a triple-time rate of pay.
Decatur workers initially are excited about the new agreement, Mr. Gordon said, because the contract is better than the one negotiated in 1996, in which the union believes it took many concessions.
But Decatur's 1,800 union workers also have had to endure the scrutiny of the investigations surrounding the recall of Firestone Radial ATX, Radial ATX II and Wilderness AT tires. About 2.7 million Wilderness tires, plus portions of the other tires, were made in Decatur.
While union and company officials have downplayed the effect of the recall and the pending lawsuits resulting from injury- and death-causing accidents in vehicles equipped with BFS-made tires, it may have expedited the contract negotiating process, the USWA spokesman said.
"The company had to deal with fires on different fronts," he said. "If the issue had dragged on, it may have lost focus. We wanted to bring negotiations to a conclusion and move forward, but that was always our strategy."
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 the tire recall and pending lawsuits, a lingering labor dispute with the union may have been "pretty disastrous."
He believes results of the recall and lawsuits will be damaging but not catastrophic to BFS.
Faced with all its troubles, BFS likely wanted to put an end to the labor issue, said David Meyer, associate professor of management at the University of Akron's College of Business Administration.
"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. Residual hard feelings come from the previous multiplant labor dispute in 1994-96.
The United Rubber Workers, which merged with the USWA in 1995, struck against the tire maker for 10 months beginning in 1994 and took another 17 months to secure a contract. BFS' use of about 2,300 replacement workers during the dispute only made relations worse, he 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?"
BFS has two U.S. non-union tire plants—in Aiken County, S.C., and Wilson, N.C.
The USWA—pending ratification of the three BFS 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 BFS was selected as the target company for pattern bargaining.
A Goodyear spokesman said the firm and the USWA are scheduled to return to the table for mid-contract reopeners in Cincinnati Sept. 13.
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., factory.