QUINCY, Ill.—Titan International Inc. expects its new four-year labor pacts with United Steelworkers (USW) union locals at its three U.S. plants—which will raise pay and improve benefits—will allow it to improve efficiency at those plants, according to Titan Chairman and CEO Maurice Taylor Jr.
With the new contracts in place, Titan plans to add up to 300 employees in late March/early April to increase tire output, Mr. Taylor said, without elaborating as to the nature of the jobs or at which plant(s).
USW locals 164L, 745 and 890L at Titan's plants in Des Moines, Iowa, Freeport, Ill., and Bryan, Ohio, ratified the new deals March 15 after more than five months of negotiations. Titan's pacts at the Bryan and Freeport factories expired two years ago, and workers at both plants have been operating under the terms of a “best and final proposed contract” since then.
The agreements are similar but distinctive for each factory, said Anthony Alfano, legal counsel for the USW.
“This is a good contract for Titan employees and shareholders,” Mr. Taylor said.
The new pacts, according to Mr. Taylor, provide workers with a 5- to 6-percent pay increase over the duration of the contract. The percentage of the pay boosts vary each year from plant to plant, but no increase in a given year exceeds 2 percent.
Workers at Bryan and Des Moines got 6-percent pay hikes over four years, while those at Freeport opted for a 5-percent boost with a bigger pension package.
In terms of the recent negotiations, he said he believes the Steelworkers “have a better understanding today on how Titan needs to use its unionized work force for the benefit of its employees as well as shareholders. Without profit, there are no jobs.”
He said Titan can offset the wage increases with better efficiency and utilization. “We're all in this together. And we have to make it work that way. I have some great employees in my plants...and the company is doing well.”
Wages were important to the USW, Mr. Alfano said, but so were benefits.
“We also got improvements in our pension plan,” he said, pointing out that Titan now provides one of the best in the industry.
In the first year of the contract, the company-paid portion of the pension to workers rises to $1.50 an hour from $1.25 per hour, retroactive to 2010. The figure steadily increases over the next two years, and in the fourth year of the pact, it settles at $1.82 an hour.
“In terms of health care insurance, we were able to lower employee costs for single and family coverage,” Mr. Alfano said. “Titan will now pick up an additional 5 percent.” The benefit level of the health care plan remained the same, he said.
Overall, he said “this is a good contract, in light of the economy.”
John Vanover, president of Local 890L at the Bryan facility, said each of the plants received its own contract because there was a difference in the pay rate at two of the facilities—Freeport and Des Moines, which make the same kinds of tires—entering the negotiations.
Workers at the three sites didn't accept the final contract proposal from Titan and in December 2010 were locked out.
“We were at an impasse,” Mr. Taylor said. “Under labor law you keep bargaining until you have a contract or reach an impasse. I gave them my best and final offer. They turned it down. So I locked them out in December and brought them back the first of the year. Des Moines approved the contract and got paid for the Christmas holidays.
“The others didn't and didn't get paid for the holidays.”
In mid-2011, the USW filed several charges against the company with the National Labor Relations Board, which in mid-2012 ruled in favor of the union. Titan appealed the decision.
Now that the contracts have been ratified, Mr. Alfano said, the charges have been dropped.
This report appeared in Rubber & Plastics News, an Akron-based sister publication of Tire Business.