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November 6, 2005Tower workers face pay, benefit cutsAuto supply industry going through changeTRAVERSE CITY - Workers at Tower Automotive Inc.'s local plant are being pressed for millions of dollars in wage and benefit concessions as deep financial problems in the state's auto industry ripple toward northern Michigan.Around 280 hourly employees at Tower recently were asked to take 6 percent wage cuts, increase their insurance costs and give up other benefits as part of a reorganization plan. "There's a lot of mad people," said Corine Tietz, a nine-year employee at the local Tower plant. The Novi-based auto supplier filed for bankruptcy in February as part of a debt restructuring effort, among several suppliers in Michigan hurt by lower production volumes because of the slumping auto industry and escalating steel prices. Tower estimates wage and benefit reductions will save the company about $2 million a year at its Traverse City operation, a figure that will increase in future years. Workers are in the second of a five-year labor agreement approved in summer 2004. A handout to local workers on proposed concessions said they are "necessary for a successful reorganization of the company." They include: - A 6 percent across-the-board wage reduction for union workers. Employees can move up the wage scale but top pay rates will be frozen for the duration of the contract. - Increases in co-pay amounts for health, prescription and dental insurance to 30 percent of the cost of coverage, with future premium increases paid by employees. Tietz said the changes will increase her health insurance costs to almost $100 a week, compared to $15 a week now. - Suspension of company contributions to workers' 401(k) plan as of Jan. 1, effective until 12 months after Tower emerges from Chapter 11 proceedings. The union made a counter-proposal last week and negotiations continue, plant workers said. Tower workers across the country face similar demands, company officials said. "We've asked to talk to all our unions (about wage concessions)," Tower spokeswoman Sharon Wenzl said. "To successfully emerge (from bankruptcy), we need to contain our costs." Wenzl said the company's management and customer base already see the bankruptcy's impact through wage and benefit cuts and higher product costs. She refused to divulge salary and benefit reductions for Tower's white collar employees. "There's been concessions by lots and lots of constituency groups," Wenzl said. Labor analyst John Revitte said workers at auto-related companies and other manufacturers can expect similar pressures from employers, in the wake of widespread publicity over worker concessions at giant auto companies like General Motors and suppliers like Delphi Corp. "It's becoming very scary," said Revitte, a professor of labor relations at Michigan State University. "The relationships have really changed between the auto companies and their suppliers. They're becoming much more difficult - and much more cutthroat." Revitte said it can be hard for labor representatives to determine if wage concessions are really critical to a company's survival or just another way to boost its bottom line. "It's very difficult for these union representatives to sort out," he said. The company wants to complete negotiations by month's end, Wenzl said. If it's unable to reach agreement with the union it will try to re-work the contract through federal bankruptcy court. United Auto Workers Local 5110 represents the local Tower workers. Union officials did not respond to requests for comment. The local Tower plant, located in the Garfield-Heidbreder industrial park, produces stampings and accessories for various automakers, including Toyota and GM. The company has 60 locations in four continents, with more than 12,000 employees and annual revenues over $2.5 billion. [an error occurred while processing this directive] |