The United Steelworkers of America has sued to delay or block the sale of Cooper Tire & Rubber Co.'s Cooper-Standard Automotive division, saying labor contracts at four plants preclude a sale until new owners reach agreement with the union.
The USWA, which represents 1,500 workers at Cooper auto parts plants in Auburn, Ind.; Eldorado, Ark.; and two facilities in Bowling Green, Ohio, filed the lawsuit Sept. 27 in U.S. District Court in Fort Wayne on behalf of USWA Local 634 at the Auburn plant.
The legal action came just more than a week after Cooper announced a $1.17 billion deal to sell the automotive unit to two New York-based investment equity groups.
The USWA said its contracts with Cooper contain successorship language, and the new owners must have a deal with the union before completing the sale. The union said it asked Cooper Tire repeatedly to introduce its representatives to the prospective buyers so that bargaining could be completed without delay of the sale.
In a written statement, Cooper Tire said the planned sale of Cooper-Standard is a ``stock sale...structured in a manner that would essentially leave the automotive business unit intact, with employees remaining employed, the continuation of all existing union relationships and all existing Cooper-Standard labor contracts remaining in effect.''
Cooper said it believes the USWA's interpretation of the successorship-for example, that the union has the right to require any buyer to negotiate new agreements before a sale takes place-``is wrong contractually and violates federal (labor) law.''
The contract language in question states: ``The company agrees that it will not sell, convey, assign or otherwise transfer the plant covered by this agreement or significant part thereof that has not been permanently shut down unless the following conditions have been satisfied prior to the closing date of this sale: (a) The buyer shall have entered into an agreement with the union recognizing it as the bargaining representative for the employees within the existing bargaining unit. (b) The buyer shall have entered into an agreement with the union establishing the terms and conditions of employment to be effective as of the closing date.''
Spokesmen for the USWA said this language is common in contracts in the steel industry, and it was added to the Cooper contracts after the United Rubber Workers merged with the USWA in 1995.
In its suit, the USWA is asking the court to require Cooper to submit to arbitration covering the four plants in question and to block Cooper from selling or transferring control of Cooper-Standard until completion of negotiations between the buyers and the USWA.
Cypress Group, which along with Goldman Sachs Capital Partners is buying Cooper-Standard, said, ``Our plan is to acquire Cooper-Standard intact, with employees remaining employed, with all existing union relationships continuing and with all existing Cooper-Standard labor contracts remaining in effect.''
Cypress lauded Cooper's ``harmonious and productive relationship'' with the union and stated it anticipates a ``strong and mutually beneficial relationship'' with the USWA.