Titan CEO says he might cut investment in Freeport
Maurice Taylor, the CEO of one of Freeport's largest employers, Titan Tire International, says he might move the tire business out of Freeport if local union officials there don't go along with his plans to cut staff and improve productivity.
"That's the way it is," Taylor told The Journal-Standard in an interview last week. "We're going to run a profitable plant or we're going to shave it down until it does make money. I told everyone that when [Titan] first came here."
In a Jan. 2 memo acquired by The Journal-Standard, Taylor warned that he might reduce the number of union employees there from 551 to 500. Under special conditions, he could cut staff to fewer than 475 employees, the minimum staffing level required by Titan's contract with United Steelworkers Local 745.
"This is a for-profit company. I told Freeport that Titan would be investing money in Bryan (Ohio) and Des Moines (Iowa), not in Freeport," Taylor wrote in the memo.
Although he acknowledged that Freeport's work force has "great ability," Taylor added that the company "must cut its losses" if it can't get its staffing and wages to a level that will allow it to be profitable.
Steve Vanderheyden, USW Local 745 president, said the union was surprised by the memo because it hasn't had a formal discussion with Taylor concerning the discrepancy.
"He's had no discussion with us regarding any additional reductions," Vanderheyden said. "We'll enforce the contract he's agreed to. If (Titan) violates the collective bargaining agreement we will seek to enforce it through the methods that the contract provides."
Under the contract terms, the tire plant is protected from closure, even if it is unprofitable, until Nov. 19, 2010, when the contract expires.
However, it could be closed due to "an Act of God that makes continuance no longer feasible," a summary of the contract states.
After Goodyear's sale of the plant to Titan in 2005, staffing was to be maintained at about 742 with the understanding that 225 employees would be offered an exit incentive.
So far, only 141 employees have taken the incentive. About 45 other employees employed through Goodyear left, bringing the staffing level to about 551.
Staff levels may be adjusted to reflect "future efficiency improvements," or as necessary to reflect "the discontinuance of sales to Goodyear of non-farm tire production or Banbury mixed stock agreements," Taylor's memo stated.
In a Dec. 1 letter to union members, Vanderheyden said the Freeport plant is producing about 40 percent fewer tires than it did when it was owned by Goodyear.
"Titan is using a different approach," Vanderheyden said. "It is planning to staff the plant with as few employees as possible, and then lowering the production expectations to correspond to the staffing that is available."
Still, he downplayed the tensions between the union and management.
"Sometimes it may seem as if these (two) sets of expectations clash. However, I am sure we all share the same desire to make our plant successful," he wrote.
Taylor has made productivity a major issue for the Freeport plant. In his memo, he expressed concerns that 5 percent of the work force isn't staying on task, and that he wants to pare back the work force to eliminate those employees. But the union's strict grievance process prevents plant management from doing so, Taylor claims.
"If you've got a couple of bad apples, you have to get the bad apples out or they spoil all the good apples," Taylor said in his memo. "The problem you have in this factory - down here [in Quincy] the employees know, when you get a bad apple, the employees tell you we've got a bad apple. That's not what happens up in Freeport. You get a bad apple, well then the union wants you to protect the bad apple. It's wacko, and that's just how this union is."
However, Vanderheyden says employee work ethic isn't really an issue.
"The plant is struggling to meet its output expectations with the current staff," he said. "So we would not anticipate any additional reductions."
Contact reporter Ryan Blackburn at email@example.com.