Fed-Mogul Deal With Union Saves St. Johns Plant

A Federal-Mogul Corp. parts plant in St. Johns has been saved after workers at UAW Local 925 voted to accept a last-minute contract agreement with the Southfield-based company. Federal-Mogul had threatened to close the factory, which manufactures washers and bushings for the auto industry, and move its 470 jobs to Mexico, Argentina or China where labor costs are cheaper.

From The Detroit News, MEMA Industry News

DETROIT — A Federal-Mogul Corp. parts plant in St. Johns has been saved after workers at UAW Local 925 voted to accept a last-minute contract agreement with the Southfield-based company.

Federal-Mogul had threatened to close the factory, which manufactures washers and bushings for the auto industry, and move its 470 jobs to Mexico, Argentina or China where labor costs are cheaper.

Last month, the workers rejected Federal-Mogul’s demands for $9.4 million in pay and benefits concessions in return for retaining the plant. The company then lowered its demand to about $9 million, but union leaders initially scoffed that that was still too steep.

Federal-Mogul sought to reduce the number of paid holidays and lower holiday pay, but the plant’s current wage rate of $18.70 an hour would be frozen for four years.

But the sides continued negotiations beyond Friday’s contract expiration in hopes of coming to some sort of agreement, which they did over the weekend. Details of the new contract were not immediately available.

“Both Federal-Mogul and the union leadership worked tirelessly to arrive at an agreement that was, in the end, acceptable to both parties,” the company said in a written statement late Saturday.

In June, Federal-Mogul reached an agreement with two locals at its Greenville factory, northeast of Grand Rapids. The company also had threatened to close that plant with 310 workers without concession pay and benefit concessions and tax breaks from the state.

The town of 8,000 was already reeling from the announcement earlier this year from Swedish appliance maker Electrolux AB, which is closing its plant there, moving the operation to Mexico and eliminating 2,700 jobs.

Since 2001, Michigan has lost about 150,000 manufacturing jobs, with companies forced to close, consolidate or shift production overseas to lower costs.

Federal-Mogul plans to emerge from bankruptcy in the next few months. It was forced to file for that protection after inheriting billions in asbestos liability lawsuits when it bought a British company a few years ago.

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