Businessweek Archives

Bridgestone Is Nearing Some Hairpin Curves


Top of the News

BRIDGESTONE IS NEARING SOME HAIRPIN CURVES

Samuel L. Torrence believes in the United Rubber Workers. He lauds the URW for its safety efforts and its role as a collective voice. But Torrence is no union man--he's the head of labor relations at Bridgestone/Firestone Inc. (BFS), the U. S. arm of Japan's largest tiremaker.

That goodwill faces a stiff test. Pummeled by internal problems and an industrywide slump, BFS lost $350 million in 1990, and it's laying off workers and mulling more cuts. Moreover, on Apr. 8, the URW selected BFS as its target in negotiating a new master contract that it will then try to apply across the industry. Since Bridgestone still was completing its acquisition of Firestone during the last negotiations in 1988, this will be the first time that a Japanese-owned company will undertake pattern-setting negotiations with an old-line U. S. industrial union. Despite the rancor that had marked earlier relations between Firestone and the union, the two sides may be able to avoid a strike. Whether BFS can also slash costs is an open question.

Bridgestone has taken a sharply different approach from Firestone, which suffered a week-long strike in 1988 after it refused at first to adopt the industry's pattern contract. Bridgestone has made it clear to workers that it sees its mission as making tires, while Firestone made no secret of its intent to exit the business. And soon after it bought the U. S. company, Bridgestone voluntarily returned more than $1 an hour in cuts that Firestone had extracted at two tire plants.

Bridgestone's biggest break with the past came this January. After a poll of workers at a new $350 million plant in Warren County, Tenn., BFS voluntarily recognized the union there. The reasons: to avoid a nasty organizing drive, and to win the union's help in shaping a self-directed, motivated work force.

That's only half the battle for management, though. The plant improvement program that Bridgestone began at Firestone was overly ambitious, and management turmoil at the U. S. company slowed decision-making. Squeezed by high costs and weak prices, Bridgestone found itself losing money in Europe and the Americas.

Further, BFS and the union haven't been so buddy-buddy lately. Although Bridgestone closed part of one nontire plant in 1990, most of its early cuts involved salaried staff. But last month, Bridgestone indefinitely furloughed 341 hourly workers. "Relations are strained," notes Steven Gensler, president of the URW local in Decatur, Ill.

NO CONCESSIONS. Now, BFS faces an Apr. 20 contract deadline with a union whose new president, Kenneth L. Coss, ousted the incumbent last fall on a "no concessions" platform. While that stance might set the stage for a showdown, the two sides should be able to work out a modest agreement, improving pensions while providing some cost relief to the company on health care. Bridgestone is unlikely to seek cuts in the union's $15 hourly wage, while the union may look for a new training fund. "The bargaining has been anything but confrontational," says one industry insider.

That's right in line with the view of new BFS President James P. McCann, who sees his task as empowering employees. However, he acknowledges that BFS will curtail capacity "where necessary and if necessary . . . . Hopefully, somebody else will do it, and we won't." If he has to make cuts, though, the warm feelings at BFS could cool off fast.

WHAT THE RUBBER WORKERS WANT...

Under new President Kenneth L. Coss, who ran on a "no concessions" plank, workers seek a pay hike, but the key money issue likely will be pensions. They want more than today's rate of $23.50 a month per year of service

...AND WHAT MANAGEMENT AIMS TO GET

Bridgestone/Firestone is seeking to gain more flexibility to improve productivity in its plants. Given deep losses, management must be especially concerned about keeping health care costs in lineZachary Schiller in Akron


Too Cool for Crisis Management
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus