Union workers and management at Titan International Inc.'s recently acquired agricultural tire plant in Freeport are discussing proposals to reduce the work force.
The United Steelworkers (USW) Local 745 said it was notified July 19 by plant management that Goodyear would discontinue buying rubber stock from the plant as well as cut its purchases of all-terrain vehicle (ATV) tires by two-thirds, effective Aug. 1. As a result, Titan indicated to the union that it may need to lay off some workers who are connected directly to the manufacture of those products for Goodyear, said Local 745 President Steve Vanderheyden.
Local news reports put the number of potential layoffs at 75, an estimate plant management initially gave to USW officials in the July 19 meeting. But Mr. Vanderheyden pointed out the number was ``too soft to comment on'' as company officials have lowered that estimate since. He also couldn't confirm how many are involved in manufacturing product for Goodyear.
About 700 union employees and 70 non-union employees work at Freeport, which manufactures ag tires. Goodyear is Freeport's only customer for rubber stock and ATV tires.
Despite the announcement from management, Mr. Vanderheyden said that as of July 26 he hadn't received confirmation from Goodyear that it indeed is withdrawing orders for the rubber stock, which he said is used by the Akron-based company to produce tires at its Danville, Va., facility.
When Titan purchased the Freeport plant in December as part of a $100 million deal for Goodyear's North American farm tire business, the Quincy, Ill.-based tire and wheel maker agreed to no plant layoffs for the first two years unless Goodyear chose to stop purchasing rubber stock. As a pre-sale agreement, Goodyear contracted with Titan to buy rubber stock from Freeport for two years, Mr. Vanderheyden said.
``I think the management here believes that because of some slowdown in the industry in general, (Goodyear) may be able to ramp up their own production capability to absorb what we were supplying,'' he said.
However, the labor contract also provides that the company and union hold ``a series of exchanges'' to minimize the effect of that loss of business, Mr. Vanderheyden explained. Hence, layoffs may not be necessary to offset the production loss.
If Goodyear does discontinue rubber stock purchases and reduce its ATV tire orders Aug. 1, the USW will be ready with a proposal on how to minimize potential layoffs. ``If we agree on a plan to do that, then we implement that plan,'' he said. But if there is no agreement on a plan, then Titan's labor contract calls for the issue to go to expedited arbitration.
At presstime, Goodyear did not return calls from Tire Business seeking comment. Titan also would not confirm that layoffs would occur at Freeport. ``While we can't speak for the union, we don't have any information on layoffs at the Freeport plant,'' a Titan spokewoman told Tire Business.
Mr. Vanderheyden declined to disclose capacity at Freeport, noting that changes have been made since Titan took over in January. In December, Freeport had a rated capacity of 10,000 tires a day. The loss of Goodyear's rubber stock orders shouldn't affect the plant's tire production.
``We'll just keep plugging away making the tires we were making before the reduction,'' he said.