The Cooper Tire & Rubber Co. will immediately appeal to the U.S. Seventh District Circuit Court of Appeals the decision by the U.S. District Court in Indiana to grant a preliminary injunction on the sale of four of the 47 Cooper-Standard Automotive facilities that are being sold to an entity formed by The Cypress Group.
Ten days after Cooper´s announcement on September 17 that a definitive agreement had been signed to sell the automotive group, the Steelworkers of America (USWA) filed a complaint asserting they have the right to require a buyer to negotiate new labor agreements before a sale takes place.
"We believe this ruling will be reversed on appeal and both parties continue to pursue the closing of this transaction according to the original schedule," said Tom Dattilo, Cooper´s chairman, president and CEO. "We have protected the employees of Cooper-Standard as the sale agreement requires that all existing contracturan arrangements are maintained."
The court´s decision affects the Cooper-Standard Automotive facilities in Auburn, Ind., El Dorado, Ark., and two facilities in Bowling Green, Ohio.
The court´s decision said, in part:
" The Court finds that the Unions have presented a genuine dispute as to whether Cooper Tire’s stock sale falls under the provisions of the successorship memoranda. The memoranda refer to ´sale of stock´ and ´change of control.´ In addition, cases support the Unions’ position that successor clauses are arbitrable and enforceable against the employer.
"The Defendants argue that the successorship memoranda do not apply to the stock sale because Cooper-Standard will remain intact after the sale....
" There is sufficient dispute as to the applicability of the successorship memoranda to issue an injunction."
USWA International Executive Vice President John Sellers said, “Our intention was not to obstruct the transaction, but merely to protect the contractual rights of our members.
“We are obviously pleased that the court agreed with our argument that the union would suffer irreparable harm if the sale were allowed to proceed before an arbitrator had ruled on whether the contracts required pre-sale bargaining.”
With the sale of the four USWA-represented facilities now blocked, the USWA says it "is preparing to arbitrate the dispute quickly and, should it prevail in arbitration, to immediately begin negotiating with the prospective buyer."
