Michelin’s US Plants Reach Agreement

The local membership of the USWA at three US and one Canadian BFGoodrich plant have agreed new labour agreements with Michelin North America. According to Michelin, the new agreements are expected, over time, to yield a 20 per cent annual reduction in the $300 million (£166 million) yearly labour cost at the four union facilities.

After weeks of negotiations, it seems that the Michelin/United Steelworkers of America (USWA) saga could be drawing to a close. The local unions voted overwhelmingly in favour of agreeing to the deal. Of the 3400 USWA members at the three US plants, 70 per cent voted to ratify the agreement. 94 per cent of Canadian members voted to agree to a similar deal at the company’s Kitchener, Ontario plant. Both agreements expire on 22 July 2006.

The USWA sees the agreement as a victory for its members. According to the newly ratified deal, during the course of the agreement Michelin has agreed that there will be not job losses and that it will not close any of the plants. The union also believes the deal will safeguard member’s future job security as it includes an agreement to set minimum capital expenditure to $150 million (£83 million). This is designed to reposition all four plants so that they can increase their production of higher margin, larger sized, branded tyres.

“Although negotiations were long and difficult,” said John Sellers, USWA executive vice president and head of the union’s Rubber-Plastics Industry Conference (R-PIC), “our membership’s patience and determination paid off with a new agreement that preserves jobs and ensures a future for all four plants, which were endangered by foreign imports and lack of investment.
“At the same time,” Sellers said, “we also maintained our members’ living standards and preserved affordable health care for more than 9,000 retirees and surviving spouses.”

Michelin, on the other hand, sees the deal as a challenge for its North American workers. “We know it’s possible for plants to be profitable in North America,” said Jim Micali, chairman and president of Michelin North America. “We’ve been doing it successfully for many years at our Michelin-brand facilities. Now, these four facilities have the chance to step up and prove that they can become competitive with the rest of our North American operations.”

What the USWA didn’t mention was that US workers will be expected to contribute “significantly more” towards healthcare costs, and that Canadian workers will “assume responsibility” for the provincial health insurance premiums. Canadian workers will have to contribute an additional 18 cents per hour towards offsetting healthcare costs. In addition, healthcare premiums for retired US workers will increase, beginning in July 2005 and continuing until December 2006. New employees will also feel the consequences of the deal and will come under a new five-year wage progression programme which will “substantially reduce hourly pay.”