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USW Lashes Out at CTNA After Charlotte Cut Announcement

(Akron/Tire Review) Just a day after Continental Tire North America (CTNA) announced major cutbacks and layoffs at its hometown Charlotte, N.C., passenger tire plant, the United Steelworkers (USW) issued what it termed a “stinging criticism of management’s failure to understand how to compete in North America.”

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CTNA, said the union in a public statement, “appears determined to service its shrinking demand in the U.S. and Canada with imports from low-cost countries.”

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Ron Hoover, the USW’s executive vice president, said: “Unlike successful companies, Continental never developed a rational marketing strategy nor made adequate investments in product research and development. Instead of developing a constructive dialogue with its workers and their union, and pursuing new solutions, this company keeps repeating its mistakes while demanding labor concessions."

On Monday, CTNA announced it would cut Charlotte production and lay off some 513 hourly and salary workers at the plant in a move to reduce expenses. The cuts would come in two phases – March and June – and would leave just an estimated 573 workers employed at the plant.

CTNA had set a Dec. 31, 2005, deadline for a response from the USW and USW Local 850 on its demand for a 35% across-the-board wage and benefit reduction, which the tiremaker said was necessary to keep the plant cost competitive. Last summer, CTNA cut production at the plant by about 30% and reduced the workforce by some 300 people.

In an early December 2005 interview with the Associated Press, CTNA President and CEO Alan Hippe indicated that the company had not ruled out closing that plant entirely if cost cutting objectives were not met.

“Manufacturing costs in our Charlotte facility are higher than any other Continental tire plant worldwide, and we have been very clear from the start that we cannot continue in our current situation,” said Hippe in Monday’s announcement. "Our overall objective is to reduce significant financial losses while expanding our market position in the North American marketplace for all tire operations. For the last several years, we have been analyzing our North American manufacturing operations and implementing initiatives to reduce costs in all areas of our North American tire business.”

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For its part, the USW remains hopeful of a resolution before the first cuts come in March. "We remain open to the possibility of 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."

CTNA is currently in talks with the USW for a new master contract. Its current contract with the union ends in June.

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