Next year is going to be a critical one for tire industry labor negotiations. Union contracts with Goodyear Tire & Rubber Co., Bridgestone Firestone North American Tire LLC (BFNT) and Continental Tire North America Inc. (CTNA) -- plus a contract covering four Michelin North America Inc.-owned BFGoodrich plants -- expire in 2006.
New contract talks are slated to begin simultaneously next year (one month before each contract's expiration date). Leading the union's charge will be Ron Hoover, vice president of the United Steelworkers' Rubber/Plastics Industry Conference.
Hoover, who replaced long-time VP John Sellers, has been at his post only since September 2005. But the Steelworkers union, part of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, stretches back decades.
A former rubber worker, Hoover started at Goodyear's Topeka, Kan., plant in 1964. Over the years he served as a plant steward for the old United Rubber Workers (URW) and also on a number of local union committees.
In 1983, Hoover was elected president of the URW Local 307 in Topeka. He served two terms and then was appointed to the URW staff in 1989.
He was back-up coordinator in the union's 1991 contract talks with Goodyear, and coordinated negotiations with the company in 1994 and, more recently, 2003.
There's nothing pretentious about Ron Hoover. He's as down-to-earth as the constituents he serves. But he's also a tough negotiator with a clear sense of purpose. And he realizes that today's tire manufacturers operate in a much different business climate than they did when he was rising through the ranks.
MTD recently sat down with Hoover at the Steelworkers' international headquarters in Pittsburgh, Pa., to discuss the critical issues that tire manufacturers and the union will face in 2006.
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MTD: What will be the most significant issue in this year's contract talks?
Hoover: Strengthening job security provisions.
MTD: Job security/preservation is the top goal?
Hoover: Job security. You say preservation... I think more in terms of expanding the (job) base.
MTD: I'd like to examine each company's situation, starting with Goodyear. Goodyear's current contract with the union, which was ratified in 2003, seems to limit its ability to close factories and reduce production. However, several months ago, Goodyear Chairman and CEO Bob Keegan publicly stated that Goodyear intends to close high-cost factories and bring in more tires from Asia. How will you address that issue?
Hoover: We're not closing Steelworker factories, end of story. Now, when it comes to imports from Asia, under the current contract they can import the small commodity-type tires. The tires we have in our plants are high-margin tires that have all the research and development behind them and all the advertising -- Assurance, the new Fortera, etc.
MTD: How do you prevent a tire manufacturer like Goodyear from attempting to close its U.S. plants and move production offshore?
Hoover: We withhold our labor, if necessary. (The union plans to start negotiating with Goodyear in June 2006.- Ed.) As Steelworkers, we have a good track record of working with them and will continue to do that, but should we agree to disagree... I think Bob Keegan holds the key should that be an eventuality.
MTD: Moving on to BFNT: after a couple years of on-and-off talks, the union finally forged a new contract with Bridgestone Firestone last June -- a retroactive contract that expires in July. What were the major sticking points during negotiations?
Hoover: Job security was a huge issue. Retiree health care was an issue, too. (Negotiating with companies) is like a big interlocking puzzle. You've got to have the capital investment to keep the latest technology in the plants. You've got to have good R&D (at plants). And you have to have a company that knows how and where to bring tires to market.
You look at some tire companies... and they will remain un-named, but some of them have done an extremely poor job of strategically placing their tires where they belong on the market.
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MTD: During negotiations with BFNT, the Steelworkers accused Bridgestone of wanting to outsource jobs. BFNT countered by saying it's committed to making tires in North America. What's your take on the long-term future of Bridgestone Firestone manufacturing tires in the U.S.? The company says it's committed...
Hoover: ...that's good to hear. We'll codify those commitments during the 2006 negotiations. That will go a long way toward helping us achieve a deal.
MTD: One of your goals will be to strengthen job security provisions. How will you go about that? Are there key points you'll focus on?
Hoover: Absolutely. If you look at the Michelin/BFGoodrich agreement -- the 2003 agreement -- it has capital investment commitments and product type (commitments). Those are the sort of things you put in a document...
MTD: Really specific requirements?
Hoover: Yes. You can put a requirement in a document for 40,000 tires a day, but if you don't identify what those tires are...
MTD: CTNA just entered into new negotiations with the union and claims it even asked for early talks to address what it perceives as problems at its Charlotte, N.C., plant. CTNA claims Charlotte is its most expensive plant to operate. CTNA has since asked workers in the plant to take a 35% cut in both wages and benefits. What has the union's reaction been?
Hoover: Continental hasn't always said that Charlotte was its highest cost plant. Originally that was Mayfield, Ky. (CTNA indefinitely suspended tire production in Mayfield 13 months ago.- Ed.)
Continental's demands could be more severe than 35%. We are in discussions with the company, but I'd rather not comment on it in this stage of negotiations. But let's not talk about Continental. Let me talk about a business plan that would lead any tire company to disaster in North America: no commitment to R&D.
Not that they're all bad folks, but when many of the foreign (tire companies) picked up these domestic tire companies, from Mohawk to General Tire to BFG, Uniroyal, Firestone... those tires had an appeal and a pull with people in North America. To continue that, you have to be on the cutting edge and bring out new products to stay ahead of the curve. You've got to have well-thought-out investment in R&D.
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The tire companies that are successful don't have more than half of their output in North America going to original equipment. Those (companies) don't make money on tires they're selling to Ford and Volvo and GM.
When you've got a company that stakes my members' future on selling to OE, where you can't get a decent return on your dollar, and no marketing strategy...
MTD: CTNA has said it wants to increase the number of tires it brings into this country from offshore sources. Do you think the request that CTNA has made in Charlotte and the threat it also has made to slash production if the request is not met is Continental AG's way of ramping down the Charlotte facility toward an eventual permanent closing?
Hoover: I'll answer that question but I'm not going to do it today. I see a lot of public comment on Charlotte. I think the company is trying to use the media to its advantage, and that's OK. But you have to remember -- I have 1,000 members down there who are depending on me.
MTD: Michelin narrowly averted a strike at three of its BFG plants in the U.S. last summer. According to the union, Michelin asked for some major concessions during contract talks. After the new contract was finally ratified, Michelin went on record and called the deal "a pioneering arrangement that helps provide some of our oldest plants with a fighting chance in today's business environment." How did you reach that point?
Hoover: A lot of hard work. I'll surprise you and tell you that my limited relationship with Michelin I would term as good... better than good. They seem to be a company that you can work with. I do think it was a pioneering agreement for that group.
MTD: Are you at liberty to discuss anything that was especially unusual or unique about the contract?
Hoover: The job security provisions, the capital investment (commitments), their unique way of addressing retiree health care... it took some good thinking on both sides of the table. Another thing forged at the table was putting more higher-value tires in those plants. That plays into job security.
MTD: Michelin has many non-union facilities in North America. Do the Steelworkers have plans to unionize any of these plants?
Hoover: If there's interest on the part of employees in any non-union rubber operation in North America, we'll be there in a heartbeat.
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MTD: Do you generally approach plants or do they come to you and say, "We're interested in unionizing?"
Hoover: Both, but typically we'll have interest from the plant. We'll have someone call us out of a plant that's non-union and ask, "Why don't we have a union?" And we'll say, "We'll come out and talk to you."
You're never going to put a union in any place where the employees don't feel the need for it.
MTD: There was a strike earlier this year at Cooper's Texarkana plant. How would you describe your relationship with Cooper?
Hoover: I have a good relationship with local union leadership.
MTD: After months of talks, Titan International Inc. and the local chapter of the Steelworkers in Freeport, Ill., have reached an agreement that will allow Titan to finally acquire Goodyear's farm tire division, a deal that includes Goodyear's farm tire factory in that town. Given everything that's happened over the last eight years -- including the 40-month-long strike at Titan's Des Moines, Iowa, plant that ended in 2001 -- what's the union's relationship with Titan CEO Morry Taylor like?
Hoover: We have a good relationship with Mr. Taylor. I think he has a business model that may work. We're a pretty sophisticated union when you get down to it. We know a good business model when we see one.
(The Freeport deal) is an extremely complex matter. I was fortunate to have the leadership at the Local 745 (in Freeport) that I had. They're very detail-oriented and they did an outstanding job.
MTD: What's the status of Titan and the Rosler Group's negotiations with the union to buy CTNA's OTR tire plant in Bryan, Ohio? (Due to contract provisions, any entity that wants to buy the plant must first forge a new contract with the Steelworkers.- Ed.)
Hoover: I would term it on hold. There have been no face-to-face discussions with Titan on Bryan.
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MTD: Will they have to take place eventually?
Hoover: Sure, absolutely. It will require a lot of face-to-face meetings. Hopefully the Freeport discussions have given us a model that will make (Bryan negotiations) go quicker.
MTD: Back in 2003, the union's intention was to use Goodyear's contract as a template for the rest of the industry. But the other tire companies rejected the idea, basically stating that you can't paint everyone with the same brush...
Hoover: ...there are more similarities than differences (in the various companies' contracts). A couple of differences jump out at you. We didn't get a seat on the board of directors at Bridgestone Firestone or Michelin.
MTD: Did you ask for seats?
Hoover: Of course we did. (Goodyear conceded a seat on its board to the Steelworkers as part of its 2003 contract.- Ed.) But there are certainly more similarities when it comes to wage increases, protected plant status, investments, etc.
MTD: It seems like some tire manufacturers want to ship production to Asia and other low-cost regions. Many of them cite cost savings as reasons why. In your opinion, why do they want to do this? What's the motive?
Hoover: You told me earlier that Bridgestone Firestone is committed to North American tire manufacturing, and when you get beyond the fluff, I think Goodyear is, too. Michelin produces a lot of tires in this country.
I'm not so sure there's a mad exodus overseas. There's some of it, but it's our job to contain it at the bargaining table. And we're committed to doing that.
MTD: Has the union been forced to change the way it looks at things and how it approaches the bargaining table due to increased globalization?
Hoover: It's brought us to the realization that capital investment and looking at the company's business plan has to be on the table. In the old days, it didn't matter; production was going to be here. We didn't have to worry about that.
