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Rubber workers agree on contract provisions.

Rubber Workers agree on contract provisions

Uniroyal Goodrich Tire Co. and the United Rubber Workers agreed on a new contract to replace the contract scheduled to expire in April. A company official said resolution of key issues would aid new management iii dealing with problems resulting from a corporate restructuring. Rubber Workers President Milan Stone said the agreement demonstrated the union's willingness to insure companies' "continuing viability." However, union officials also said that the terms at Uniroyal Goodrich would not set a pattern for Firestone Tire and Rubber Co. and Goodyear Tire and Rubber Co. where contracts also were to expire in April. On the contrary, Uniroyal Goodrich and the union agreed to negotiate on or after April 12, 1990, to determine what portion of the "industry pattern" wage and benefit terms at Goodyear and Firestone will be incorporated into their contract.

Tire companies' attempts to adapt to the growing "internationalization" of production and sales has resulted in corporate acquisitions and mergers and revamping of operations, including plant closings. At Uniroyal Goodrich (which resulted from the 1986 merger of Uniroyal, Inc. and B.F. Goodrich Co.), recent changes in management occurred because of the December 1987 acquisition of Goodrich stock shares by Clayton & Dubilier, an investment firm that already owned a substantial portion of Uniroyal shares.

Under the contract, employees will not receive specified wage increases during the 39-month contract period which ends in April 1991. During the first year, the provision for quarterly cost-of-living adjustments will operate at the existing rate of I cent an hour for each 0.26-point movement in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (1967=100), but only to the extent that the increase in the index exceeds 4.5 percent. Adjustments in the second and third contract years will not be subject to similar limits.

In return for the wage restraint, employees will receive "equity units" of the company described as "a stake in the company's success," according to a corporate official. The units will be held in trust by the Rubber Workers and will be redeemable in cash if the company is sold, assumes the status of a publicly-owned corporation, or on the fifth anniversary of the agreement, whichever occurs first.

From the employees' view, the most important provision was a guarantee that the company will not close its plants in Fort Wayne, IN, and Opelika and Tuscaloosa, AL. The fate of the fourth plant, in Eau Claire, WI, will be considered by a joint committee.

Another provision calls for a joint effort to contain rising health care costs. In another change, pension rates for future retirees will be raised by $2 in the third year, to $22 for the former Goodrich employees and to $20.50 for the former Uniroyal employees. Equalization of these rates and other provisions will be negotiated during the agreement period.
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Title Annotation:Developments in Industrial Relations
Author:Ruben, George
Publication:Monthly Labor Review
Date:May 1, 1988
Words:482
Previous Article:Auto industry update.
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