Maremont: Contract offer fair 'It's not easy competing with offshore companies,' parts manufacturer says

February 9, 2007

Foreign competition and rising health-care costs are increasing pressure on U.S. automotive companies, a Loudon auto parts manufacturer said Thursday - the company's first public comment since its workers went on strike Monday.

"It is not easy competing with offshore companies who are not required to provide their employees workers' compensation, health care or retirement benefits and only pay less than $2 per hour," Maremont Exhaust Products said in a statement.

The company said its contract offer was fair, and it hopes the workers will come back to the bargaining table.

Workers went on strike Monday when their labor contract expired to protest a proposal that would significantly increase health insurance premiums, said Dale Smallen, president of the International Association of Machinists and Aerospace Workers, Local 2545.

"They are shifting the burden of the health-care costs to the workers," he said.

The union represents 227 of 400 Maremont employees. Maremont produces automotive exhaust components, including heavy-duty mufflers and catalytic converters.

Maremont, which has operated in Loudon for more than three decades, is owned by International Muffler Co. of Schulenburg, Texas. While competition has forced some U.S. companies to ship automotive jobs overseas, Maremont said it wants to stay in Loudon.

As a result of downturns in both new car sales and the aftermarket - which adds nonfactory parts and features to new cars - numerous plants have either downsized or closed, and much of the manufacturing process has been outsourced overseas. "We, as owner-operators, have chosen to do our best to keep our employees' jobs in Loudon," the company said.

On health-care expenses, the company said even though costs are rising "at an alarming rate," Maremont would pay "78 percent of our workers' premiums while leaving in place a 401K retirement benefit system through which the company matches up to 5.5 percent of the employees' contributions."

Smallen was unsure about the 78 percent figure, but he said the proposed increase for health coverage amounts to 68 cents an hour for employees with a family plan. The union proposed a substantial wage increase to offset rising insurance costs before contract negotiations broke off. Smallen said the current average hourly wage is $13.