US: Tower Automotive unions threaten strike

By just-auto.com editorial team | 31 January 2006

Unionised workers at eight Tower Automotive plants have voted to strike if a bankruptcy court judge approves the components supplier's motion to cancel existing labour contracts, according to reports in the US.

The vote reportedly was approved by more than 95% of Tower employees represented by the UAW, the United Steelworkers and the IUE/CWA in votes held at plants in Michigan, Illinois and Indiana over the weekend.

Novi, Michigan-based Tower moved earlier this month to set aside union contracts and modify retirement benefits and a bankruptcy court hearing is scheduled for 27 February - Tower filed for 'Chapter 11 reorganisation' last February. It has since prepared a plan to close plants and slash its North American work force.

In a statement, UAW vice president Bob King said: "We want to preserve US manufacturing jobs and keep Tower as an active participant in the US automotive industry.

"Unfortunately, Tower's reorganisation plan is a recipe for failure - it takes money from workers, enriches executives and does nothing to really fix the company. We will have no part of it."

Tower's response in a statement was: "Tower Automotive's top priority is to develop a plan of reorganisation that permits its US operations to exit from bankruptcy as a profitable, competitive automotive supplier.

"This will enable us to continue supporting our customers and offering our colleagues valued employment because the only real job security is to be competitive. This can only come with sacrifice from all key parties.

"Salaried and non-union colleagues have already made concessions totalling US$32 million annually. We need our union colleagues to participate in a fair and equitable manner or many jobs will be jeopardised.

"While we know these concessions are difficult, they are some of the necessary actions to ensure that Tower's plan of reorganisation is successful in a very competitive environment.

"Tower Automotive remains committed to negotiate with its unions outside of the court process. Tower Automotive remains ready to meet at any time with its unions to negotiate a settlement."

US reports noted that Tower is the world's largest vehicle frame (chassis) maker and a critical supplier to US domestic vehicle makers, which accounted for 73.4% of its North American business in 2005. Of that, Ford accounted for the largest portion, 38.1%, the reports said, citing court documents.