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Steelworkers at U.S. BFG plants ratify labor contract

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Steelworkers at three Michelin North America Inc. (MNA)-owned BFGoodrich plants in the United States have ratified a new labor contract.

The agreement -- which expires July 2006 -- covers some 3,400 workers at factories in Opelika and Tuscaloosa, Ala., and Fort Wayne, Ind.

Employees at the facilities voted 70% in favor of the agreement, which was first announced last week.

Workers at MNA´s Kitchener, Ontario, plant ratified a separate contract earlier this week, ending a strike that started on June 1.

"The new agreements are expected, over time, to yield a 20% annual reduction in the $300 million yearly labor cost at the facilities through ground-breaking cost reductions and increased efficiencies," say MNA officials.

They add that the contracts will bring the BFGoodrich factories "more in line with the flexibility and competitiveness of Michelin´s union-free plants in North America."

MNA has 21 plants in North America; 17 of them are non-union.

Concessions won by MNA include:

* greater use of contingent staffing -- up to 10% of its full-time United States workforce "with increased utilization during weekends;"

* larger contributions from employees for heath care;

* bigger health care premiums for retirees, starting next summer;

* a five-year wage progression program "that provides substantially reduced hourly pay" for "employees hired in the future;"

* reductions in employee cost-of-living pay increases.

In return, MNA has agreed to:

* invest $150 million in the four plants through 2006 to upgrade technology and outfit them to produce larger size, higher margin passenger and light truck tires;

* not close or enact "significant employment reductions" at any BFGoodrich plant "beyond the negotiated productivity improvements" during the next two years;

* make a one-time transition payment of $20 million to help U.S. retirees with increased health care costs;

* make a "modest" pension increase "consistent with inflation."

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