Just last week, we reported on the United Auto Workers’ rejection of Continental Tire’s request to re-open their contract to negotiate cost reductions.
As a result of the UAW-represented employees’ rejection to re-open their contract, Continental Tire announced today that it will be closing its Huntsville, Alabama plant.
Today, Continental Automotive Systems U.S., Inc. announced that the company will close its automotive components manufacturing facility in Huntsville, Alabama by December 31, 2010. The product lines currently manufactured at the Huntsville facility will be relocated to other Continental automotive facilities located in Seguin, Texas and Nogales and Cuautla, Mexico. Product development operations will be relocated to other Continental facilities located in Auburn Hills, Michigan, Deer Park, Illinois and Guadalajara, Mexico. The Huntsville facility employs approximately 1281 salaried and hourly employees, which includes approximately 300 employees currently on layoff with recall rights.
“The Huntsville facility has the highest manufacturing costs of any Continental automotive electronics plant in North America and we were unsuccessful in reducing these costs through labor negotiations with United Automobile Workers (UAW) union and other cost reductions in capital, equipment, overhead and expenses.”
While it is unknown what the UAW told its members to secure their rejection of the company’s request to re-open the contract, or if the UAW members rejected it on their own, one thing is certain: Any cost reductions negotiated by the union and the company still would have been better than unemployment.