PITTSBURGH—Apollo Tyres Ltd. must reach collective bargaining agreements with United Steelworkers locals at Cooper Tire & Rubber Co. plants in Findlay, Ohio, and Texarkana, Ark., before it can proceed with its pending acquisition of the Findlay-based Cooper, an arbitrator has ruled.
The ruling by the arbitrator, James Oldham, recognizes that the “successorship clause” in the USW's labor agreements with Cooper applies to the Apollo deal, the USW said, and orders Cooper to put the sale of its plants on hold until Apollo and the USW can agree on contracts covering about 2,500 USW members at Locals 752L in Texarkana and 207L in Findlay.
The USW sought arbitration in the deal to protect workers at the two plants.
The arbitration hearing took place Aug. 28 in Washington under the direction of Mr. Oldham, a law professor at Georgetown University.
“Successorship clauses often are the only thing protecting workers' rights when sales like this take place,” said USW International President Leo Gerard. “Our union has gone to bat time and time again in numerous industries to protect the rights of our members and to make companies live up to their commitments.”
A spokesperson for Apollo said via email that the company is looking forward to working with Coop-er and the union to resolve the matter.
“The strategic merits of Apollo's combination with Cooper are clear,” the spokesperson wrote.
According to a Cooper spokeswoman, the company will continue to assess its options, but it and Apollo are continuing discussions with the USW with the aim of reaching “an amicable resolution quickly to minimize any impact on our original transaction closing schedule.
“Both Cooper and Apollo remain firmly committed to the strategic rationale for the pending merger—which will create a leader in the tire industry with a strong presence in the world's largest tire markets and in the fastest growing geographies—and are optimistic that a mutually beneficial resolution with the USW can be reached,” the spokeswoman wrote in an email.
Apollo Tyres has offered to buy Cooper for about $2.5 billion in what Mr. Oldham described as a “debt-financed buyout” of all Cooper's publicly held shares.
“The USW said it looked forward to resuming bargaining with Apollo and Cooper,” said USW Secretary Treasurer Stan Johnson, who chairs the union's tire bargaining.
“Our members are rightly concerned about the debt that will be placed on Cooper as a result of this merger. We intend to work out agreements that protect our members' interest.”
Cooper has scheduled a meeting of shareholders in Cleveland, Ohio, on Sept. 30 to vote on the proposed sale.