News From USW: Continental Tire Threatens to Slash Retiree Benefits; Company's Announcement Interrupts Talks With Steelworkers

PITTSBURGH--March 22, 2006--Continental Tire of North America (CTNA) disrupted negotiations today with the United Steelworkers (USW) by unexpectedly announcing that it may alter benefits for its retirees. The company, in a letter to USW executive vice president Ron Hoover and in meetings today, asserted that the company has the right to alter retiree benefits in any way it chooses as soon as the insurance agreement expires.

CTNA also asserted that it could reach back and collect past insurance costs from retirees for some benefits paid for during the term of the current agreement. The labor agreement expires on April 30, 2006. Benefits under the insurance agreement continue for another 90 days.

"These benefits were bought and paid for by retirees during their years of faithful service at Continental," said Hoover. "We will not stand for this and will fight it, in court if necessary."

The meeting had been called to discuss the company's decision to relocate Charlotte tire production. As a result of today's talks, CTNA agreed to submit a new proposal which would enable production to remain in Charlotte.

The Union agreed to await receipt of a new proposal. The USW's existing proposal, which provides savings of $12,000 per employee, remains on the table.

"We urge Conti to accept this proposal, which offers substantial savings and keeps production in Charlotte," said USW Local 850 president Mark Cieslokowski. "And we remain open to discussing new proposals from the company."

The USW represent more than 850,000 workers in the U.S. and Canada. Some 70,000 are employed in the tire and rubber industry, including 1,400 at CTNA's Charlotte plant.