After settling a strike at a BFGoodrich plant in Canada and negotiating a new contract at three BFG plants in the U.S., Michelin North America Inc. has pledged $150 million in new investments to upgrade capacities at the four facilities.
About 1,000 United Steelworkers of America (USWA) members at the BFG plant in Kitchener, Ontario, ended a nearly three-month strike on Aug. 23, ratifying overwhelmingly a new two-year deal.
In the U.S., about 3,400 unionized BFG workers were poised at Tire Business' deadline to ratify a new master contract that provides sought-after job security for union members and production cost cuts for Michelin.
Workers at BFG plants in Opelika and Tuscaloosa, Ala., and Fort Wayne, Ind., were set to complete voting Aug. 26 on the new contract. The USWA was expected to announce the results of the vote on Aug. 27.
The U.S. workers had been working on a day-to-day extension since April 2003, when the previous master contract expired.
Tentative agreements between the two sides covering all four plants were reached Aug. 20. If approved, the contracts would expire the same day-July 22, 2006-which is something the USWA had been seeking in negotiations.
The agreements provide plant security during the contract term, guarantee no layoffs except by ``normal attrition,'' and protect at least 90 percent of ticket items in the individual plants. Michelin also committed to spend at least $150 million in capital expenditures at the four plants to meet the goal of producing ``higher-margin, larger, branded tires'' there, according to the contract summary.
If the contract is ratified, U.S. workers won't receive direct wage increases, but wages will be raised an average of about 3 percent per year because of cost-of-living adjustments (COLA). Union members will divert 50 cents per hour of past unincorporated COLA toward retiree health care costs and capital investments at the plants, the summary said.
A change in the wage progression schedule also will reduce costs. The previous schedule called for a new worker to move from 70 percent of full pay to 100 percent in three years; now it will take five years.
The pension multiplier will be raised to $54 per month per year of service from $50, retroactive to retirements on or after April 24, 2003.
``Our primary objectives in these negotiations were to preserve jobs and ensure a future for all four plants-which were endangered by foreign imports and lack of investment-to defend our members' living standards and to preserve affordable health care for more than 9,000 retirees and surviving spouses,'' said John Sellers, USWA executive vice president and head of the union's Rubber/Plastics Industry Conference.
``We believe we have accomplished those goals.''
Dave Lowe, Michelin's vice president of labor and employee relations, said the agreements would provide the framework for making the company's BFGoodrich facilities viable.
``These plants provide quality products for our customers and contribute greatly to their local economies,'' he said. ``We've achieved pioneering agreements that can help provide some of our oldest plants in North America a fighting chance in today's challenging business environment and a very competitive industry.''
Much of the wage progression and pension language from the master contract is the same in the Kitchener agreement. The two sides also settled the key health care benefit issue, in which the Canadian workers were being asked to pay for medical costs for the first time, given the socialized health care programs in Canada. But the workers' health care will remain covered, said Terence Habermehl, Local 677 financial secretary.
Retirees, who also were in danger of losing health benefits, will keep full coverage as well, he said.
The Kitchener workers will be brought back to the plant incrementally, with full production expected within two weeks, Mr. Habermehl said. The company does all its own processing at the factory as well as tire making, so the start-up will have to be at the front end before tire production begins, he said.
Maintenance workers reported back first on Aug. 25 to begin repairing some equipment at the site, he said.
Local 677 members have been solid through the ordeal of the strike, Mr. Habermehl said. But many question why they went out for as long as they did when they would have agreed back in May to the proposal they eventually ratified.
``I think they would have taken that offer,'' he said. ``The strike has been tough on some people. Three months is a big chunk of time.''