Now that the United Steelworkers (USW) locals at three Michelin North America Inc. tire plants have ratified a master contract, the union can focus on getting deals done with Goodyear and Bridgestone/Firestone.
The contract with Michelin's BFGoodrich tire manufacturing unit that covers 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 about 3,400 USW members at those locals, and the union has designated the BFG pact as its model for talks with other tire makers.
Michelin said the new pact allows it to get its labor costs in line with market rates while limiting its long-term liabilities, according to a statement from Chairman and President Jim Micali.
``We're committed to our manufacturing base in North America,'' Mr. Micali said. ``But significant change has to occur to assure the competitiveness of our plants.''
>From the union's perspective, the contract-which runs through July 18, 2009-was successful because it preserves the cost-of-living allowance raises and ``maintains excellent health care benefits for both our active and retired members,'' said USW-BFGoodrich coordinator Larry Jackson.
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.
Current hourly workers' pay will not be affected as long as they remain in their present jobs, she said.
BFG did not disclose the amount of savings it would realize with the new wage structure, but Mr. Micali said getting the company's labor costs in line with market rates and limiting its long-term liabilities are ``crucial to securing the future viability of our North American facilities.''
Union employees also will boost their share of health care coverage, resulting in savings to the company of $5 million a year. In addition:
* 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 to assist retirees, the company said, while the union members will contribute the first $1 of future hourly cost of living allowance raises;
* The tire maker will make minimum capital improvements of $100 million in the three plants through 2009 toward larger, higher-margin branded tires;
* There will be 90-percent ticket protection at all three production sites; and
* The company will not make any plant closures or significant employee reductions during the term beyond those already announced, unless it is making inventory adjustments.
Michelin closed its plant in Kitchener, Ontario, last month and also said it will lay off 30-40 percent of the work force at Opelika by year-end.
Mr. Jackson 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 ones.
The pact also guarantees 100-percent protection of all technical maintenance jobs and a 90-percent guarantee for all others, according to the union.
Active members will continue to have no monthly premiums for health care coverage. Ron Hoover, USW executive vice president and head of the union's Rubber/Plastics Industry Conference, said ``it was very difficult negotiating an agreement that protected jobs, benefits and pensions, but we did.''