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Mitsubishi plant’s future at stake in union vote

Mitsubishi plant’s future at stake in union vote By Ryan Denham | rdenham@pantagraph.com | Posted: Wednesday, December 15, 2010 12:00 am
NORMAL — Mitsubishi Motors North America’s union employees face a difficult choice today: Accept a wage cut and hope for a new model, or understand their plant eventually will close.
That’s according to a summary of proposed contract changes that United Auto Workers Local 2488 members will vote on beginning at 5 a.m. today. The realization that production could cease is spelled out in the one-page document prepared by the UAW for its membership and obtained Tuesday by The Pantagraph.
“The Company has stated that if these proposed changes are not ratified, the search for new product will cease, the current models will eventually terminate and the plant will close,” it reads.
MMNA currently builds the Galant, Eclipse and Spyder cars and the Endeavor sport utility vehicle.
Last year, amid industrywide turmoil, MMNA’s sales — 53,986 vehicles — were its worst in more than a decade. They’ve risen only 2 percent so far in 2010.
If the deal is approved, hourly wages would revert to $24 for production workers and $28.50 for maintenance associates on April 4, 2011. But that’s only if MMNA’s Japanese parent, Mitsubishi Motors Corp., follows through on long-rumored plans to add a model to the plant’s production lineup in 2012 or early 2013.
Those are the pay rates the workers had after they took a nearly $5-an-hour pay cut two years ago in hopes of attracting a new model.
Some of the wages were restored this fall after the union declined to give MMNA more time to seek a new model for the plant. That raised the hourly pay for those two groups to the current level of $25.67 and $30.21, respectively.
If the union agrees to wage cuts but MMC fails to commit to a new model, pay levels would stay put, but the under-used plant’s future would remain in limbo. A “yes” vote also would extend the current contract another three years, to 2015, including language for no involuntarily layoffs.
The vote comes as MMC crafts a new strategic plan for its worldwide operations, including Normal and six other manufacturing sites outside the U.S. Employees watched in recent weeks as MMC made plans for a new plant in Thailand and expanded ties with Nissan.
MMNA is McLean County’s fourth-largest private employer, according to Economic Development Council of the Bloomington-Normal Area.
MMNA and UAW Local 2488 officials said Tuesday they will not comment until after the vote, expected to close at noon Thursday. About 1,000 UAW members among the plant’s work force of about 1,300 are eligible to cast ballots.
The UAW’s bargaining committee recommended ratifying the changes, the summary said.
Finding savings
The wage reduction could generate a few million dollars annually, based on Pantagraph estimates.
While that would be only a fraction of the cost needed to develop a new platform, any potential savings need to be considered in a larger context, said David Cole, chairman of the Michigan-based Center for Automotive Research. That includes the strengthening of the Japanese yen, recent cost gains made by domestic automakers and the slow recovery of the auto industry in general — factors that have made competition especially tough for Japanese automakers right now, he said.
“It’s an unusually difficult period,” Cole said. “It’s a much different environment and they’re (Mitsubishi) going to be far more cautious.”
Gov. Pat Quinn’s administration said Tuesday it is monitoring the situation.
“We are in very active communications with the company, and we will continue to do whatever we can to retain these jobs and investment in Illinois,” noted Marcelyn Love, a spokeswoman for the Illinois Department of Commerce and Economic Opportunity.
State Sen. Dan Rutherford, a Chenoa Republican who will be sworn in as state treasurer next month, said it is important the two sides work together during tough financial times.
“We need to be looking at a fair arrangement for both the employees and the employer that recognizes the very tight global economy,” said Rutherford, who helped recruit Mitsubishi to Illinois in the mid-1980s as an international business manager for the state’s economic development agency.
— Karen Hansen and Kurt Erickson contributed to this report.

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