Steelworkers' union criticises Conti's market share strategy

Pittsburgh, Pennysylvania -- Continental Tire North America Inc. drew sharp criticism from the United Steelworkers following the company's announcement that it planned to lay off 435 workers at its Charlotte, North Carolina, plant in 2006.

The USW maintained the tyre maker did not understand how to compete in North America and was unwilling to work with the union to develop strategies to win market share.

"Unlike successful companies, Continental never developed a rational marketing strategy nor made adequate investments in product research and development," charged Ron Hoover, executive vice president of the USW and head of the union's Rubber/Plastics Industry Conference. "Instead of developing a constructive dialogue with its workers and their union, and pursuing new solutions, this company keeps repeating its mistakes while demanding labour concessions."

Conti told Charlotte plant employees in November, shortly before contract negotiations with the union began, that it intended to cut $32 million in costs from the facility, which meant that the workers' wage and benefits package would be reduced by 35 percent. If workers didn't agree to the pay and benefits reductions by January, the company said it would make cutbacks at the plant in early 2006.

On Jan. 9, Continental introduced a plan to lay off 513 employees, including 435 union workers, at its Charlotte plant in a two-phase cutback that will ultimately reduce daily production significantly.

About 241 hourly workers are expected to be laid off by March 13 and another 272 by June 30. The plant will operate with about 573 employees thereafter, the company said.

The union left the door open to "investigating ways to maintain production in Charlotte," said USW Local 850 President Mark Cieslikowski. "It´s up to the company to decide whether they will disclose information vital to generating the sincere dialogue required to come up with real solutions."

From Rubber & Plastics News (A Crain publication)

Press release from USW