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Union proposal falls well short, says Continental

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Continental Tire North America Inc. (CTNA) says negotiations with the United Steelworkers (USW) this week "did not result in any agreement to achieve the manufacturing-cost reductions necessary to avoid the previously announced layoffs" in its Charlotte, N.C., tire plant.

In a press release issued late Friday following two days of negotiations in Charlotte, Rick Ledsinger, CTNA's vice president of human resources and chief negotiator, said the following:

"Although the union acknowledges our need to reduce manufacturing costs and has presented us with a concessionary proposal, the USW still has not recognized the gravity of the company's competitive disadvantage in Charlotte. In fact, the union's leadership told us that they do not believe that we need the cost reductions outlined in our Charlotte restructuring plan."

Continental says its calculations project that the union's proposal would reduce manufacturing costs by $1.7 million; CTNA is asking for $32 million.

CTNA and the USW have been in negotiations focused on the company's restructuring plan since Oct. 20, 2005. On Jan. 9, CTNA announced production curtailments and resulting layoffs in the Charlotte tire facility due to high manufacturing costs. The layoffs are scheduled to begin March 15.

Continental says the layoffs may be reduced or avoided if the parties can reach an agreement to reduce manufacturing costs by $32 million.

On Friday, Feb. 3, CTNA presented the union with a new proposal. The company says the union has yet to respond to the proposal.

"The Charlotte plant has the highest costs of any of CTNA's plants," says Ledsinger. "We must significantly reduce our manufacturing costs if we are going to continue to produce tires in Charlotte."

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