The recently announced acquisition of Cooper Tire by India based Apollo Tyres has led to concerns about the status of Cooper retirees’ benefits. A group has formed led by Dick Stephens, former president of Cooper Tire.
While there is concern about the potential financial risk associated with the purchase of Cooper Tire, it is important to deal in facts.
The tire industry has increasingly become a global business and it is almost assured that this acquisition will take place. The risk of failure of this highly leveraged transaction is significant and as such, Mr. Stephens, as well as other concerned retirees, have formed a group seeking to protect the interests of all retired employees covered by a pension plan. The purpose of the group is to ensure that retirees are represented and kept informed about the status of their pensions.
Today there are groups in Tupelo confusing this issue, trying to create fear among the workers at the Tupelo plant that without a union contract their pensions are at risk. The vast majority of Tupelo employees are covered either by a 401K program or a defined benefit cash balance plan. A 401K is owned by the employee and totally safe and those covered under the defined benefit cash balance plan can take a lump sum payment at the point in time they leave Cooper Tire. And the defined benefit cash balance plan was frozen July 1, 2009 which means no further benefits are accruing to the participants in this plan.
The Tupelo plant needs to think globally and focus on safety, quality and productivity. They will soon enter an environment where plant investment will be controlled entirely on the efficiency of the plant. A union will bring no investment into the plant, and in fact adds costs to the operation, and decreases employee earnings by exacting union dues. This outside group would only bring potential obstacles to future success. The best retirement planning for the Tupelo employees is to save as much of their income as possible, take advantage of company matching funds and strive every day to improve the plant’s operation.
Retired employees no longer affect daily operations so we need to act as one to protect our interests. The Cooper Retirees Organization has been formed to press for Cooper and Apollo to stand by their historic commitment to former loyal employees. It is true, nothing is guaranteed, but they are trying their best to protect these benefits.
It has been well publicized that a small group of Cooper executives appear to have feathered their own nests and provided for a significant financial gain for themselves without working for Cooper long enough to deserve such a gain. If they have any personal integrity, surely, they can make sure that those who gave years of loyal service to Cooper will find a way to protect the future pension payments for all involved.
The Cooper Retirees Organization seeks membership from all interested employees. The group will work with professionals and government groups to ensure the best possible outcome in this extremely challenging economic environment.
Questions about the organization can be directed to email@example.com firstname.lastname@example.org. There is a membership contribution form located in today’s paper on page 13A.
JIM FITZGERALD is a retired Cooper Tire executive and former manager of Cooper’s Tupelo plant.