Federal-Mogul's St. Johns Plant Will Stay Open

Federal-Mogul Corporation (USA) will keep its 470-employee St. Johns plant open, following union ratification of a new labor contract. St. Johns, located in Clinton County, just north of Lansing, Michigan, manufactures bearings, bushings and washers, primarily for the North American auto industry. It is Clinton County's largest employer. Early in 2004, Federal-Mogul made it clear the labor contracts covering several plants, including St. Johns, were unacceptably expensive and in for significant cuts. If new labor agreements weren't reached, F-M made it clear production would be shifted to its lower-cost manufacturing locations in Mexico, Argentina, or China. St. Johns workers, represented by United Auto Workers union Local 925, ratified the four-year contract, but only after their mid-September vote rejected a much harsher version. On September 14, Federal-Mogul's initial contract offer was soundly rejected. It would have dramatically cut health care benefits, holiday and vacation pay, frozen wages, and instituted a two-tier pay scale for existing workers and new hires. In all, the package would have saved $9.4 million by 2008. •article: F-M threatens St. Johns plant shutdown The company's second offer restored health care benefits, holiday and vacation pay, but kept the wage freeze at $18.50 per hour and other cuts intact. The contract was ratified, 250 for to 95 against. Under the approved pact, Federal-Mogul saves something less than $9 million by 2008. Specific details of the contract were not made public. In a statement, Federal-Mogul said, "Both Federal-Mogul and the union leadership worked tirelessly to arrive at an agreement that was, in the end, acceptable to both parties." The fight over St. Johns was brewing for months, but the final outcome was predictable, said most observers, after the results from a similar situation at the smaller plant in nearby Greenville. •detail article: F-M Greenville plant will stay open The Greenville pact, reached in June after significant effort, was seen as critical to ensuring the outcome in the larger St. Johns plant. Federal-Mogul has been operating under Chapter 11 bankruptcy protection since October 2001; after several false starts, it now expects to exit bankruptcy in the coming months.