Federal Mogul Corp. (USA; NASDAQ: FDML) workers in the company's Greenville, Michigan engine bearing plant have agreed to a new four-year contract.

250 members of UAW Local 2017 ratified the contract, although they had voted in favor of a strike if negotiations failed. The plant employs a total of 369 hourly workers. UAW Local 1158 represents 30 skilled trade workers.

In the 2004 contract negotiations, Federal-Mogul was in bankruptcy, engine bearing sales were off 33%, and Greenville workers were simply trying to salvage their jobs in the face of F-M's glut of engine bearing capacity. In total, they gave up a $5 million package of concessions designed to meet F-M's requirements for keeping the plant open. The package involved a wage cut of $1.19 per hour starting in the second year, a new prescription drug plan, higher medical co-pays and health insurance co-pays, and the loss of four paid holidays.

In 2004, negotiations for these givebacks were an uphill battle and it took several ballot attempts to pass the new contract. But with F-M in bankruptcy and engine bearing sales down, many workers believed F-M would close the Greenville plant regardless of what they offered. They also felt unfairly penalized as Greenville remained profitable while other engine bearing plants were not.

article: F-M Greenville offers concessions, plant will stay open
[ Greenville plant history and production details here ]
Over the next four year contract term through July 2012, workers will receive a $2 per hour across-the-board pay increase, $0.50 per year, and $5.00 increase in the health care contribution at $1.25 per year.

UAW Local 2017 President, Rickey Allen, said: "Four years ago, we took such a loss. But on this contract we gained a little. There was a lot of give and take, but they gave us a $2 an hour wage over four years. Just about everything else pretty much stayed the same. It was a lot of give and take on both sides. It wasn't a bad contract. It was fair."

Greenville has benefited from the nearby St. Johns plant shutdown, which is just now winding down. The additional work from St. Johns also gave Greenville additional bargaining leverage.

In early 2006, Federal-Mogul decided to close the St. Johns, Michigan engine bearing plant, with the loss of 420 jobs. Production from there is moving to Greenville; Blacksburg, Virginia; Puebla, Mexico; and Shanghai, China.

article: F-M closing St. Johns engine bearing plant
Mr. Allen went on to say, "They could have come back at us really hard this time. But they need this plant."

Built in 1940, Greenville was only Federal-Mogul's fourth factory. It initially produced propellers for PT boats but was later reconfigured to manufacture engine bearings.

After being expanded 17 times, the Greenville bearing plant now covers more than 210,000 square feet and in 2007 added storage and light assembly space by buying a neighboring property from Tower Automotive. Greenville produces original equipment and replacement engine bearings, primarily for heavy-duty applications. Adding the St. Johns production will diversify it more into standard thinwall bearings for gasoline engines.