Michelin Reach Agreement with USWA

The labour dispute between the United Steel Workers of America (USWA) and Michelin appears to have come to an end as the two sides have reached a tentative agreement.

Michelin said that details of the deal reached with the USWA would not be disclosed pending ratification. Facilities that could be affected by the deal include plants in Alabama, Indiana and Ontario.

The international tyre manufacturer has said it must cut costs at the BFGoodrich plants, where it makes Uniroyal and BFGoodrich tyres for passenger and light truck tyres, in order to stay competitive.

The USWA objected to the proposed cuts which it said amounted to about 18 per cent and included a two tiered wage system, reduced holiday allowance and pay, and the ending of health benefits for pensioners and new employees.

Meanwhile financial analysts have predicted that labour costs play a key part in Michelin’s future earnings.
In recent weeks, Michelin shares have dropped 12 per cent while the rest of the industry remained stable, something that was largely due to fears that strike could disrupt production. Now that the tentative agreement has been made analysts it is likely that Michelin can recover from this downturn.

Michelin and the USWA had been discussing labour costs in one way or another since 2003. At the same time the US plants in question had been working under day-to-day extensions since April 2003. Talks became more driven in July after having been postponed until Goodyear Tire & Rubber and its workers had negotiated an agreement. Michelin workers have been using