TEXARKANA, Ark. (April 7, 2005) — Cooper Tire & Rubber Co. and striking United Steelworkers of America (USWA) Local 752 have reached a tentative agreement, with a vote on the contract scheduled for April 10.
If approved, the 1,600 workers could be back on the job April 11. The tire maker said the strike negatively impacted earnings in its first quarter, ended March 31, by 5 to 7 cents per share.
The pact comes after an exchange of letters where Cooper sent a summary of its proposal to the Texarkana employees and asked for a vote, while union leadership blasted that offer as an “insult.”
Michael Penney, chairman of the local's media committee, told Tire Business that a tentative pact was reached April 6, but he would not comment on specifics until union leadership had discussed it with members. A discussion was scheduled for April 9, followed by a vote the following day. Tire Business went to press April 7.
The company and union hadn't met since a federal mediator was brought in March 24. Talks broke off afterwards and there had been a “complete deadlock” in negotiations, said Don Davies, staff representative for USWA District 12. The mediator called for another meeting the week of April 4, and the two sides decided to meet early on April 6 before the mediator arrived, he said. The negotiators worked out the tentative pact without the mediator's help, Mr. Davies said.
About 1,600 members of USWA Local 752 went on strike March 12 at the Texarkana plant, citing health care issues as the main sticking points.
In the letter dated March 29 obtained by Tire Business, Cooper said employees elsewhere have shared health care costs and that the proposed plan that would go into effect January 2006 is “basically the same” as salaried employees have had since 2002. Cooper also said the economic package is “cost neutral,” meaning increases in wages, cost-of-living and retirement are offset from savings in other areas.
“So that you understand the economic sense behind this contract offer, consider that the tire group's profitability has declined dramatically and there are many tire companies more profitable than Cooper,” the company's bargaining team wrote. “…We intend to keep our entire company competitive by making higher margin tires here and less profitable tires in the lower cost countries.”
But the union bristled at the offer summary. It said Cooper rejected a union offer to work under the 2002 contract for three years.
“(Cooper's) proposal is an insult, and yet it is trying to convince us that we should put it to a vote,” a March 31 letter from the local's President David Boone said. “We have no doubt that the company's package would be overwhelmingly rejected. And they know this. The reason they are pressing for a vote is that they want to create the precedent that we will put any so-called final offer to a vote no matter how bad it is and then—after rejecting one, two or three terrible packages—we might accept an inferior offer simply out of frustration.”
In its letter, Cooper said it took the matter directly to the membership to “give (members) the facts.”
“(Union leadership) keeps telling us that you are solidly behind them,” the letter said. “Based on the phone calls and questions we get, it appears that many of you—like us—do not understand why you are not working.”
The tire maker closed the letter warning that Cooper and its customers are being hurt by the strike.
“Texarkana's reputation is being damaged, and our customers are finding new suppliers for the tires they need,” the tire maker said. “We cannot keep the Texarkana plant closed very much longer.”
In the letter, Cooper said health care costs for Texarkana hourly employees in 2004 were more than $14 million. Cooper expects the costs to rise about 12 percent a year, reaching about $25 million in 2009.
By 2009, the tire maker said it would be paying 87 percent of the health care costs, with hourly workers kicking in about 13 percent. Cooper said employees at similar-size companies pay about 23 percent.
According to the summary, the health care plan carries co-pays, deductibles, prescription costs and out-of-pocket limits similar to other Cooper employees. It does not provide retiree health care for people hired after March 2005.
But the union said salaried and Findlay, Ohio, employees were not faced with similar concessions.
“They want concessions from us in order to finance their investments in China and elsewhere,” the union letter charged.