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The eBearing News
September 23, 2004
Federal-Mogul Threatens
St. Johns Plant Shutdown
copyright © 2004 eBearing Inc.
Federal-Mogul Corporation (USA, operating under Chapter 11 bankruptcy protection since third quarter 2001)
threatened to close its bearing / bushing / washer plant in St. Johns, Michigan, putting more than 470
people out of work.
Employees, represented by the United Auto Workers union, rejected the company's contract concessions package.
The St. Johns contract, with UAW Local 925, expires at midnight, October 1, 2004.
Earlier this year, the company specifically targeted St. Johns and the nearby Greenville plant for
cost reduction and concessions packages. The situation involved so many jobs and such an important
automotive-related industry in Michigan that Governor Granholm stepped forward to craft a
business retention package specifically targeted to Federal-Mogul.
Greenville's 310-employee UAW labor contract came up first, earlier this summer. After a very public process and
failing the first time, the contract in Greenville passed on its second vote.
• article: F-M Greenville bearing plant accepts concessions, will stay open
After working out the agreement in Greenville, Federal-Mogul made clear its next plant
to come under the microscope would be St. Johns, where the company said it needed $9.4 million
in concessions over the course of the next four-year contract. If a concessions package was not
approved, F-M stated it would move the St. Johns work to other facilities in Mexico and overseas.
In St. Johns, the scenario has so far played out as it did in Greenville, with United Auto Workers Union Local 925
members rejecting F-M's first contract offer. Reportedly, it went down to a 77% "NO" vote.
The St. Johns concession package was not specifically outlined for eBearing, but it likely followed the recent
Greenville package -- wage reductions or freezes, fewer paid holidays, retirement package cuts, and
reworking the medical plan for a higher employee contributions.
After the resounding no vote on the $9.4 million package, Federal-Mogul has reportedly come back to
the bargaining table to give the UAW a slightly different contract offer, but with concessions still
totaling more than $9 million over the course of the contract.
Employees told eBearing they are unsure if Federal-Mogul's second offer means the UAW is now being
forced to take another vote, and, if it comes, if that vote would have a different outcome.
"After we saw what happened in Greenville," one worker said, "we're suspicious, and we feel like
we're being manipulated."
So far, the union local has not decided to take a vote on the second contract offer.
The St. Johns factory was built in 1945. It produces engine and transmission bearings, bushings and
washers for automotive and other OEM customers such as Ford, General Motors, DaimlerChrysler and John Deere.
F-M said sales of products produced at St. Johns dropped by $20 million between 2000 and 2003, even
as direct labor costs and overhead increased. In August, the company said St. Johns earned just $66,000
on sales of over $6 million, or 1.1%. Cost controls are needed, said Federal-Mogul, to offset the
higher costs of raw materials and yearly price reductions demanded by its automotive OEM contracts.
Interestingly, since the Greenville contract was approved, Federal-Mogul has announced plans to
expand and modernize Greenville, although the process
may result in the loss of some jobs as more processes are automated.
Because Federal-Mogul is the largest employer and largest taxpayer in the St. Johns area, many
politicians and local leaders believe the loss of its 470 jobs and the plant would be a
devastating blow to the local economy. So far this year,
local authorities have spent $45,000 on programs and studies to keep Federal-Mogul in St. Johns.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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