Ratified agreement between Continental and USW enhances worker benefits

Oct. 16, 2006

The tentative agreement between Continental Tire North America Inc. (CTNA) and the United Steelworkers (USW) union regarding the closure of Continental's facility in Mayfield, Ky., facility has been ratified by union members.

The agreement provides enhanced severance, health care and retirement benefits for hourly employees displaced as a result of the closure of the Mayfield plant. In addition, it provides terms for the orderly phase down of operations at the plant.

"Continental Tire is well aware of the impact that the closure of the Mayfield plant will have on our employees and the Mayfield community," says CTNA spokesman Rick Holcomb. "We worked long and hard to reach an agreement with the union that provides continued retirement security and health care coverage for our employees and retirees in Mayfield.

"Continental Tire sincerely appreciates the contributions of our Mayfield employees to our North American tire organization and wishes them success in their future endeavors."

On Aug. 2, 2006, CTNA announced that the Mayfield plant would be closed on or about Feb. 1, 2007, as a result of escalating costs for energy and raw materials and declining sales to original equipment customers for the company's passenger and light truck tire products.

CTNA and the USW engaged in negotiations with respect to the closure of the plant in September and October and reached a tentative agreement on Oct. 5, 2006.

Under the agreement, CTNA will provide lump sum severance payments of up to $30,000 based upon years of service to employees that lose their jobs as a result of the plant closing. These employees will also be eligible for up to 24 months of company-paid health care.

In addition, employees with at least 25 years of service will be eligible for special early retirement benefits and retiree health care as well as a lump sum payment of $7,500.

CTNA and the USW also agreed to work cooperatively to relocate products and equipment out of the Mayfield plant and assist displaced employees with their transition to other employment opportunities.