Teamsters, BMW agree to contract extension at California warehouse

Teamsters, BMW agree to contract extension at California warehouse
David Phillips
Automotive News | August 11, 2011 – 5:58 pm EST
UPDATED: 8/11/11 6:47 p.m. ET

The Teamsters union and BMW AG agreed today to extend the employment contract of workers at a California parts warehouse for six months, averting about 100 layoffs scheduled for late August, the union said.

BMW, in a cost-saving move it has made at other U.S. parts warehouses, planned to hire an outside company to run the warehouse operations when the current labor contract expires Aug. 31.

It’s unclear whether BMW still plans to outsource management of the warehouse.

The move has been widely criticized by California government and union leaders and has prompted protests and boycotts of BMW dealers.

The Teamsters said BMW planned to use the extension period to work with the union to reach “a mutually acceptable solution that addresses long-term employment for workers.”

A BMW spokesperson said the talks with the union have been constructive, but declined to comment further.

Bob Lennox, secretary-treasurer of Teamsters Local 495, said in a a statement he was confident that BMW “will honor its promises to find a solution to keep their longtime, dedicated work force and ensure that these jobs remain good, middle-class jobs.”

Teamsters Local 495 represents 68 workers at the Ontario parts distribution facility. The other workers include clerical staff and supervisors.

The automaker informed warehouse employees on June 3 that their contract wouldn’t be renewed.

“This agreement shows what Teamsters can do when we stand together and fight back,” Teamsters General President Jim Hoffa said today in a statement. “I am hopeful that the contract extension signals a new path for BMW and the Teamsters.”

BMW has six distribution centers in the United States and the Ontario center would be the 5th operated by an outside contractor.

Hoffa has said the new workers would be paid lower wages with fewer benefits. BMW was criticized by the union for terminating workers after it received federal support in 2008.

“This is a mockery of America’s plant closing laws and an insult to the American taxpayers who bailed out your company,” Hoffa said in a letter to BMW in June. “American taxpayers will be asked to pay for your greed a second time when they pick up the costs for more unemployment, health care, more foreclosures and more ruined working families.”

BMW received $3.6 billion in loans from the Federal Reserve during the 2008-09 financial crisis when private credit sources dried up.

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