Despite a statement in a letter from Taylor published Apr. 12 in The Journal-Standard indicating “…it makes no difference who is elected president of Local 745,” several officials have voiced concern at the prospect of Titan closing when the current union contract expires Nov. 15, 2010.

Taylor has repeatedly expressed his dissatisfaction with current Local 745 president Steve Vanderheyden, and has threatened to close the plant if operating costs cannot be lowered. In a Mar. 9 memo, Taylor said Titan’s cost was $93,630 per employee in 2008, which he said was higher than comparable plants in Bryan, Ohio, and Des Moines, Iowa.

“The issue with your leadership is that they seem to want to play games and talk while we continue to lose money,” Taylor said in the Mar. 9, memo to Freeport Titan employees.

The company employs 500 people at its Freeport plant and has an annual payroll of roughly $50 million. Titan Tire is a subsidiary of Titan International, Inc., the third largest manufacturer of off-highway tires in North America. Titan International is a publicly held company, which trades on the New York Stock Exchange under the symbol TWI.

The prospect of the Freeport plant closing is “devastating,” FHN administrator Dr. Mike Perry said on Apr. 23.

“We’re not immune from this happening,” Perry said.

Although he did not have an exact figure on the amount of money FHN receives from Titan employees for medical services, Perry said the company’s estimate that it pays $13 million in medical insurance and workers compensation is probably accurate.

“I know we’re at about 25% of our salary cost per employee, and we are both big organizations so I would imagine they might even be a little higher than that,” Perry said.

If the local plant closed, Perry said the impact would be felt by everyone in the community, not just the hospital. He pointed to Titan employee wages and the circulation of that money in the Freeport area for everything from groceries, to retail purchases, to recreation.

“In a worst case scenario, we would have people in the community who could not afford medical care, and we are still responsible to provide those services,” Perry said.

Freeport Mayor George Gaulrapp echoed those concerns, stating that the impact of Titan closing would affect the economy of the entire region.

“It’s not just the immediate impact of the lost jobs and the lost wages, it also affects our ability to attract other employers to the community,” Gaulrapp said. “If Titan pulls out and it’s the result of a bad relationship between the owner and the union leadership, what does that say to other companies that are thinking of locating here?”

District 145 Superintendent Dr. Peter Flynn had no comment on the impending union election, or on the impact that the plant closing might have on Freeport.

Flynn said 180 non-certified district employees who are represented by the United Steelworkers Union will be voting in the Local 745 election on Apr. 30.

“I don’t feel it’s appropriate for me to get involved in commenting or attempting to influence the outcome of an election involving contract employees,” Flynn said. “The membership needs to make that decision for themselves.”

Taylor, contacted Thursday, reaffirmed that he did not care about the outcome of the Local 745 leadership election on Apr. 30.

“It’s not for me to tell them who to elect,” Taylor said.

The Titan CEO said his primary concern about the Freeport plant is the cost of operation compared to other manufacturing facilities in Bryan and Des Moines.

“If that (union) contract does not change, now, then the decision about whether the plant stays open will have already been made by next November (2010),” Taylor said. “The union leadership there has no say on whether the plant closes, or not.”

Active members of Local 745 will vote between 6 a.m. and 3:30 p.m. by secret ballot on Apr. 30, in the parking lot at the Titan plant in Freeport. The ballot will decide who serves on the 11-member Executive Board, which includes the offices of president, vice president, financial officers, and other key positions.

Vanderheyden said Thursday that union leadership is not the real issue for Titan International.

“Both Titan and the union devoted more than a year of negotiation for a comprehensive five year labor agreement and that agreement included dramatic cost savings and employee concessions to benefit Titan, if they grew the plant by hiring new employees. Titan’s problem is not with the union leadership for the contract it agreed to. Its problem is that it failed to hire more employees for this location,” Vanderheyden said.

The union president said Freeport employees are important to Titan Tire.

“Our (Freeport) plant continues to be the corporate leader in the productivity of the workforce,” Vanderheyden said. (Tire Review/Akron)

(EDITOR NOTE: Below are two letters to the editor of the Journal-Standard, one from Titan Chairman and CEO Morry Taylor and the other by USW Local 745 president Steve Vanderheyden. There is also a column by Journal-Standard publisher Stephen Trosley. We present these here as a point of clarity.)

Titan Tire CEO Argues Union Leadership
Apr 11, 2009

I would like to take this opportunity to respond to the Apr. 4, Journal-Standard article by USW Local 745 President Steve Vanderheyden. The article contains a great deal of misinformation on the status of Freeport’s Titan Tire plant. Let me be clear about one undisputable fact: Mr. Vanderheyden has never created any jobs for Freeport, but he has been there while more than 1,000 jobs have left the plant.

I appreciate that Mr. Vanderheyden was elected president of Local 745, but he has no clue on what it takes to keep the Titan Freeport plant open. He writes about Titan’s record sales and overall gross profit. What he does not say is that Freeport was not the factory contributing to the gross profit.

He claims that Titan is attempting to bully its union and its employees. He fails to mention that as chairman and CEO I spend more time on the factory floor than he does. In my experience at the Freeport plant, it is a total joke for him to say that he is a problem-solver. The only truthful part of his letter was when he wrote that Local 745 will only be successful if Titan can be successful. What he doesn’t get is the fact Titan Tire Freeport has not been successful and will not be under the current system. We’re not Goodyear and we can’t run the plant like Goodyear owns it. We can’t have the union continue to play games with our employees and the contract. We can’t keep paying people for not working and we can’t keep investing money in the plant for no increase in productivity.

It’s nice to see he finally admits that if Titan didn’t buy the Freeport plant from Goodyear, it would have closed. I personally told Mr. Vanderheyden and his committee that with their current business attitude the Board will have no choice but to close the Freeport facility at the end of the contract. He wants to talk about the future of the Freeport plant at the end of the current contract. That may be fine for him, but if that is what he wants, the decisions will be made without him. He can then sit in his office with his executive committee and discuss how terrible Titan was as they try to justify their actions.

It makes no difference to Titan who is elected president of Local 745. It’s comical that Mr. Vanderheyden writes that Freeport is the most efficient tire plan owned by Titan. It is, in fact, NOT the most efficient plant. It is interesting how he thinks there is a smear campaign against him and that the Journal-Standard is my personal mouthpiece. I guess his ego is so big and he’s so convinced he’s right that he doesn’t stop to think about what will happen to the Freeport community upon the closing of Titan Tire Freeport. He and his committee have met with Titan Tire President Bill Campbell on the existing problems, but to date he’s brought no solutions or ideas. I don’t call that a problem-solver. Mr. Vanderheyden talks about his involvement with never having a strike or a work stoppage. That may be true, but it’s also true that employment levels have continued to drop under his leadership. Between Titan and Goodyear, it’s 1,000 jobs and counting. That’s $50 million a year in payroll that’s lost under his leadership at Titan.

It’s really interesting how he talks about his understanding of the community and implies that I don’t because I live in Detroit and commute to Quincy by private jet. He should worry about doing his job, not mine. To keep our company going, my job is to work with our plants here and in Europe and customers around the world and that requires extensive travel. What he doesn’t say is that for the past two years I have spent the majority of my time in our Bryan, Ohio plant, which is a two-hour drive that I make from Detroit. Because we have plants and customers throughout the world, my office is wherever I am.

Lastly, Titan employs people, not Local 745. Titan pays the salaries, not Local 745. Anything that Local 745 contributes to the community is because of Titan and its continued success. It appears Mr. Vanderheyden is the one using propaganda to achieve whatever he is trying to do. He is focused on his election. To be clear, I don’t even know who is running against him or when the election is, but he must be concerned to try and use me as the bad guy.

Mr. Vanderheyden appears to me to be more concerned about keeping his job than whether the plant remains open. Titan Tire’s Freeport employees have been given the facts on the problems at Freeport. It is their jobs that are at stake, not who gets elected president of Local 745. I know what needs to be done, but rather than giving Titan ideas on keeping the plant open, Mr. Vanderheyden is more interested in keeping his job. What he forgets is that union presidents don’t sign paychecks and they don’t work at the plant. Maybe that is why Mr. Vanderheyden is so upset with the paper. If he loses the election, he would have to go back to work — now that would be a shock to his system.

Maurice Taylor
Chairman and CEO

Union Leadership Serves as Problem-Solver
Apr. 04, 2009

After reviewing Steve Trosley’s column in the Mar. 22, Journal-Standard (“Negotiating a battle of wills”), I found there is a great deal of misinformation about the status of Freeport’s Titan Tire plant. The column raised concerns by many Titan employees that our local newspaper might be becoming the personal mouthpiece for Maurice Taylor, Titan International’s CEO. Your article indicates that he has suggested to many that the future of the Freeport plant will be based on the outcome of an election to determine who will serve as president of the local union during the next three years. That’s odd; he hasn’t said that to the Union or to the employees.

If Taylor is promoting the election of someone to fill this important union position, it is simply about the “boss” wanting to gain leverage over employees by selecting union reps he will face in contract negotiations next year. Why wouldn’t any CEO like that kind of deal? Our local union is run by 11 members of its Executive Board, each elected by our membership in secret ballot elections that typically draw 90% turnout. In fact, the president does not even get a vote on an issue except in the event of a tie by the others. Election to these positions should be left up to employees, but your article announces a campaign by Titan to publicize reasons that the corporate management should get to choose instead.

This approach by Titan would not be a surprise to employees. Titan has a history of attempting to bully its union employees by any means possible. In fact, Titan’s Des Moines plant suffered through the two longest strikes in the tire industry; the last one lasted 40 months. At a recent meeting, corporate leadership bragged to the union that it was gearing up for the same type of aggressive approach next year.

We approach contract bargaining from a different perspective. Rather than treating negotiations as the “battle of wills” you described, I view my role as a problem solver. I believe that Local 745 will only be successful if the company we work with can be successful. If Titan wants a productive and profitable operation, we are here to help and our actions prove it. Indeed, we secured Freeport jobs when our local union made it possible for the sale of the plant to Titan at the beginning of 2006. Our agreement was required and a new Labor Agreement was negotiated allowing the sale to occur. Without this sale, the plant would have been closed by Goodyear by now. This has happened to Goodyear plant after plant, with more closings on the immediate horizon.

Tire plants tend to be very hot, dirty, dangerous places for hourly workers. However, the union and its members have made the Freeport plant the most efficient tire plant owned by Titan. In fact, the company posted record tire sales in 2008, and the Titan International’s overall gross profit exceeded $139 million. The union and its members are living up to all obligations it committed to during contract negotiations with Titan’s attorneys. If Titan could prove otherwise, I am sure it would. Instead, your article confirms that Taylor is running a smear campaign in the community.

With more than four million U.S. manufacturing jobs lost in the last 10 years, we know what we are facing every time we begin contract negotiations. Manufacturing jobs have been leaving Freeport for years, Honeywell/Microswitch, Newell/Rubbermaid, Structo/Thermos, Raleigh, Burgess, etc. When these companies faced tough times, no one printed derogatory stories about their employees or leadership. Why is it different now?

On the contrary, Local 745 has a history of being reasonable, deliberate, and practical about resolving problems to serve the interests of our union families and the true needs of the company. I have personally been involved in 18 labor agreement negotiations, as well as in the resolution of thousands of employee grievances involving five different companies/management groups. Every single resolution has been reached without a strike or work stoppage of any kind. This is a skill we will need with Titan in 2010. If you still doubt our approach is fair and reasonable, ask management of the other employer that Local 745 represents employees of: the Freeport public school system.

No one understands our role in the community better than we do. We live here, attend church here, send our children to area schools, and pay our taxes here. It is important that our community and its newspaper do not decide to speak for someone who lives in Detroit and commutes to his office in Quincy via corporate jet.

Titan’s spin efforts have prompted others in the community to recently weigh in on a subject they know nothing about. As an example, the newspaper is now printing letters from folks that have never worked at the plant, never been a member of our union or even a Titan employee. The community must recognize that as Titan tests it with strategic propaganda, corporate folks may misread our communities’ reaction to be a green light to create circumstances that will actually harm the plant’s security rather than help it. Please rethink your position and support these important Freeport workers, regardless of who Maurice Taylor prefers to face at the bargaining table in the future.

Steve Vanderheyden
President, USW Local 745

Publisher’s Column: Negotiating a Battle of Wills
Stephen Trosley
Mar. 21, 2009

River rats learn to read the river. It’s too muddy to see under the surface. But the surface is a tattle-tale.

Being raised at the confluence of the Illinois, Missouri, and Mississippi Rivers, you learn that the swell of wavelets running against the current tips off a breeze. The long ever-widening line running with the current signals an underwater snag or tree. The slight churning that never moves is a barge-sinker of a shoal or shallow.

Freeport’s economic story runs like a muddy, commerce-driving river.

A vote for a union president in a few weeks could sink Freeport’s economic barge. This has been stirring just beneath the surface – you may have heard some of the churning.

There are more than 500 well-compensated jobs at stake and the economic impact of those jobs on Freeport and Stephenson County is the subject of an upcoming story the J-S newsroom is developing for publication soon.

The jobs are at Titan Tire – which many remember as “Kelly.” Titan owner Maurice Taylor has threatened that he’ll find another place to make his product if The United Steelworkers local re-elects Steve Vanderheyden president.

Both men are hard-nosed and tough-minded individuals. Vanderheyden’s cool, common-touch manner masks the sharp mind of an accomplished, calculating union negotiator. Taylor’s shoot-from-the-lip, hair-trigger personality leads many to believe his employees are at the mercy of a nutcase. But he’s as shrewd and calculating as any successful businessman.

Cutting to the chase: Taylor has fashioned a campaign focused on dethroning Vanderheyden. He says he has no option but to close the plant if he does not get concessions that he believes Vanderheyden is unwilling to grant. Vanderheyden does not openly disparage Taylor but hints that Titan’s owner is driven by anger over being bested in the last union contract he signed.

Negotiations begin next year on the 2011 contract. Taylor does not want to negotiate that contract with Vanderheyden. I’m not in a position to know Vanderheyden’s imperatives for the next contract but he does make a convenient lightning rod based on his history. He digs in and holds on. Just ask Goodyear.

The Steelworkers Local represents two significant groups in Freeport: Titan Tire workers and D145 bus drivers. Two of the drivers, off-the-record, have told me they love their contract with the school district and they love the man, Vanderheyden, who got them that contract.

As you will see when the newsroom finishes its research on this economic story, Titan Tire employees fuel the local economy’s engine. What their income means to this community, across the entire economic spectrum, dwarfs the impact of any other segment of workers.

However, they’ve become important to that economy because of the contracts Vanderheyden has negotiated. If you were to ask my honest opinion about Taylor putting him in the crosshairs with local government and business leaders, I’d confess mixed feelings. We don’t know if Vanderheyden won’t find some flexibility in his stance for the next round of negotiations. No good negotiator shows his hand and would be unfaithful to his responsibilities if he did.

On the other hand, Taylor candidly admits no warm and cuddly feelings for the communities where his plants are located. If he sees Vanderheyden across the table, he could move essential operations and equipment to Des Moines and walk away without a second thought.

Like every other democratic election, this one will be decided on principle and pocketbook. What’s most important is not the personality clash that dominates the discussion. What matters is how responsible union members feel toward this community – a community that depends on their economic well-being.

So many fortunes are riding on so few. It’s not fair. If Taylor closes Titan Tire, it won’t matter why.

One of you pretzel-munchers can get the light switch and someone from Honeywell can get the thermostat.