GREENVILLE, S.C. (Aug. 7, 2006) — The local membership of the United Steelworkers union at three Michelin North America Inc. plants ratified a new three-year labor pact over the weekend.
The contract with Michelin's BFGoodrich manufacturing unit covering plants in Tuscaloosa and Opelika, Ala., and Fort Wayne, Ind., was approved by each of the three locals, with 61 percent of those voting in favor of the pact. It covers 4,000 USW members at those locals.
The union has designated the BFGoodrich pact as its model for talks with other tire makers.
The new contract, among other provisions, calls for a simplified five-level job hierarchy. New employees will make on average 20 percent less than existing workers but will progress to the top wage within four years, according to a Michelin spokeswoman.
Union employees also will boost their share of health care coverage, resulting in a savings to the company of $5 million a year.
The pact also includes the following items:
* The company has greater use of contingent staffing in full-time, rotating shifts;
* Retiree health care remains capped at $5,000 annually;
* The pension multiplier increases to $57 for every year of service per month, up from $54;
* Michelin will contribute $10 million to a trust managed by a third party for retirees, while union members will contribute the first $1 of future hourly cost-of-living allowance raises;
* Michelin will make capital improvements of $100 million in the three plants through 2009; and
* The company will not make any plant closures or significant employee reductions during the term beyond those already announced. It closed its plant in Kitchener, Ontario, last month and also said it will lay off 30 to 40 percent of the work force at Opelika by the end of the year.
“The North American tire market is one of the most competitive in the world, with increasing price pressure from vehicle manufacturers, unprecedented raw material and energy costs and a surge of replacement market tires from competitors in lower-cost countries,” said Jim Micali, chairman and president of Michelin. “Getting our labor costs in line with market rates and limiting our long-term liabilities are crucial to securing the future viability of our North American facilities.”
From the union's perspective, the contract was successful because it preserves cost-of-living adjustments and “maintains excellent health care benefits for both our active and retired members,” said USW-BFGoodrich coordinator Larry Jackson.
In addition, he said the USW negotiated a buyout package for more than 400 workers that will give older members more options while enhancing job security protection for younger employees. The pact also guarantees 100-percent protection of all technical maintenance jobs and a 90-percent guarantee for all others, according to the union.