NSK Americas Avoids Labor Strike in Ann Arbor

NSK Americas, Inc. (USA, a subsidiary of NSK Ltd., Japan) avoided a strike by United Auto Workers union members at its Ann Arbor, Michigan automotive bearing facility. Built in 1959, the Ann Arbor plant on Goss Road employs approximately 250 unionized workers. The factory produces automotive size bearings such as fan clutch bearings, for automakers, industrial manufacturers and their aftermarket sales in the U.S. It was extensively retooled in the late 1980's. In mid-March, the UAW revealed its intent to negotiate aggressively with NSK, soliciting a membership vote to approve a strike in Ann Arbor if negotiations failed to produce a new three-year labor contract by April 15. eBearing has learned the key issues on the table for both sides mirrored those faced by virtually every U.S. manufacturer and their employees -- spiraling health care costs, high wage rates compared to overseas competitors, and other standard contract negotiation issues. NSK Ann Arbor is widely believed to be the company's most expensive and least financially efficient location, putting it under scrutiny from the parent company to improve itself or face restructuring. Believing wage and benefits concessions were all but inevitable, a number of UAW members reportedly exercised early retirement options in the weeks leading up to the negotiations, in an effort to protect their guaranteed benefits packages. As negotiations continued, April 15 came and went as the existing contract expired and workers stayed on the job. A difficult situation was marked outwardly by only slight signs of unease -- primarily evidenced by a minor work slowdown by UAW workers and others sympathetic to their situation. Neither side wanted a work stoppage; a strike would not only have affected workers and NSK Americas immediately, but also raised an unwanted red flag to NSK headquarters in Japan that the U.S. operation was not only expensive but troublesome. The new contract, running through April 2007, requires UAW workers to begin paying a portion of their health care costs, at the same time adopting a health care plan with slightly reduced benefits. On the wage side, the new contract reportedly scales back wage increases. Production-based bonuses -- long a staple of Detroit-area UAW pacts -- are eliminated entirely. The fate of as-yet-unpaid production bonuses for 2003 are unclear. NSK employees interviewed by eBearing are hopeful that the new contract, even though it did not contain some contentious but much-needed top-line wage concessions, will be enough to keep Ann Arbor viable in the eyes of NSK corporate management. Ann Arbor became the U.S. home for NSK Americas by historical fiat. In 1958, Ann Arbor-based Hoover Ball and Bearing became NSK's U.S. market partner. When NSK established its own U.S. presence in 1962, it chose the familiarity of Ann Arbor, alongside Hoover. A 1972 joint venture put the Goss Road plant into Hoover-NSK Bearing Company. NSK bought out Hoover's position in 1975, forming NSK-Hoover Bearing Manufacturing Division. That same year, NSK built a plant in Clarenda, Iowa, to manufacture single-row ball bearings. In mid-2002, NSK Americas opened its new state-of-the-art 115,000 square foot headquarters and research facility in Ann Arbor. Outside Ann Arbor, NSK Americas' other plants are in Franklin and Liberty, Indiana; and Clarenda, Iowa. While the UAW has had a presence in its Ann Arbor plant for decades, NSK has been criticized by union leadership for "overly aggressive" tactics aimed at keeping unions out of those other plants.