July 23, 2006

Michelin, union extend contract talks

CHICAGO (Reuters) - The United Steelworkers and Michelin
North America agreed on Saturday to extend negotiations by 24
hours over a new contract for 4,000 hourly workers at three
U.S. tire plants that expires at midnight.

The union hopes to use an agreement that would cover
Michelin's BFGoodrich plants in Alabama and Indiana as a model
for talks with Goodyear Tire & Rubber Co. and Bridgestone
Corp., where contracts are also due to expire at midnight on

Goodyear and the steelworkers have agreed to a day-to-day
extension of contracts covering about 14,000 workers at 12 U.S.
tire plants. Bridgestone and the union have recessed talks over
contracts covering 6,000 workers at eight U.S. plants.

"While we have made some progress, substantial differences
on important issues remain outstanding," the union negotiating
committee said in a statement announcing the extension.

The union has said Michelin's initial proposal sought wage
cuts of $7 an hour and health-care and pension benefit
reductions. Major cuts remained in the company offer's on
Saturday, the union added.

Michelin spokeswoman Lynn Mann confirmed the extension had
been mutual. She declined to comment on the substance of the

The union's goal in pattern bargaining is to force tire
makers to compete on factors other than labor costs, but stiff
competition from low-priced import tires and escalating raw
materials prices are squeezing all tire makers in the U.S.

Goodyear plans to cut one-third of its private-label tire
business in the United States, Bridgestone expects to close an
Oklahoma City tire plant by the end of 2006 and Michelin plans
to cut production by up to 40 percent at an Alabama plant.