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By Karen Padley
CHICAGO, Nov 13 (Reuters) - Tiremaker Firestone and its largest union on Thursday said they had broken off talks on a new labor contract, raising the possibility of a strike.
The company, a unit of Japan's Bridgestone Corp. , asked the union for concessions on pension and health-care benefits late last month.
"We informed the company that as long as their proposal remains, there's no way we're going to come to the bargaining table," said Wayne Ranick, a spokesman for the United Steelworkers of America, which represents about 6,000 workers at Firestone's eight U.S. plants. "It is so far off the mark."
Ranick said the union is considering its options. Members have already authorized negotiators to call a strike.
The impact of a strike, especially on the major automakers, was unclear. Analysts said a lot would depend on car production schedules and whether the rest of the tire industry could pick up the slack.
Firestone, based in Nashville, Tennessee, said it was disappointed with the union's decision to walk away from the talks.
"Our proposal was made in good faith," said company spokesman Dan MacDonald. "We are ready, willing and able to return to negotiations whenever the union leadership is prepared to deal with the hard issues facing both of us."
The company declined to comment on the specific terms of its proposal but said it needs an agreement that allows it to remain competitive.
No new talks are scheduled. The old contract expired April 23 and has since been extended on a day-to-day basis. Either side can change that with a five-day notice.
The contract talks started in March but were put on hold until the union could complete negotiations with Goodyear Tire & Rubber Co. , its "target" company in the current round of tire industry negotiations.
The union generally picks one of the three major tiremakers as its target and then uses the agreement as a template or "pattern" for negotiations with the other two.
Firestone has declined to use the new three-year agreement ratified by Goodyear workers in September as a template.
Firestone was the union's target company during the previous round of contract negotiations in 2000. At that time, the company had just recalled 6.5 million Wilderness and ATX tires that federal authorities had linked to hundreds of deaths and injuries, many of them involving rollover accidents and Ford Motor Co. Explorers.
The recall, one of the largest in history, resulted in a $1.68 billion loss at Firestone in 2001 and dragged down results at its corporate parent.
Bridgestone's U.S. unit is in much better financial shape this time around, having reported 2002 operating income of $83 million.
Analysts say the tire industry has been struggling in the United States with weak demand due to the economy. They say labor is still a large part of tiremakers' costs.
"It's no surprise Bridgestone would try to play hardball over its labor structure," said Scott Lee, an analyst with Fitch Ratings.
The last time Firestone refused to go along with a pattern agreement was in 1994. The long and bitter strike that followed bankrupted the United Rubber Workers union and forced it to merge with the United Steelworkers of America.
The resulting labor strife also was blamed in a study of manufacturing problems at Firestone's now-closed Decatur, Illinois, plant, which produced many of the recalled tires.
Firestone stopped supplying tires to Ford as a result of the recall but remains a supplier to other car makers.