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Steelworkers at Goodyear Go on Strike

Union members at 16 of the tire maker's plants walk out after failing to reach an agreement on a new labor contract.

October 06, 2006|From the Associated Press

AKRON, Ohio — Steelworkers union members walked off the job Thursday at 16 Goodyear Tire & Rubber Co. plants in the U.S. and Canada, unable to reach an agreement on a new contract despite months of talks with the world's third-biggest tire maker.

Goodyear said the union refused to agree to help it remain competitive in a global economy. The union said the company's latest proposal would have included two plant closings and other concessions.

"Closing more plants would not only cause additional job losses and devastate the communities where the operations would cease, but it would also threaten the long-term viability of Goodyear," said Ron Hoover, executive vice president of the United Steelworkers of America, which represents the Goodyear workers.

Saul Ludwig, a KeyBanc Capital Markets analyst, said a strike could cost Goodyear $2 million a day.

The company could save $50 million a year by closing a U.S. plant, he said.

Unless the strike was lengthy, consumers should not see tire prices affected by the walkout because of the large inventory of tires in the market, he added.

Negotiations had been held since the old contract expired July 22. As more than 12,000 workers went on strike, Goodyear said Thursday that it wanted to keep bargaining.

The company will continue production at two nonunion plants in Lawton, Okla., and Napanee, Canada, and will use salaried workers at its union plants, company spokesman Ed Markey said.

The company also has imports and inventory to fall back on, Markey said, but he declined to give specifics.

Markey also declined to comment on whether the company's offer involved plant closings. The 108-year-old company had 2005 sales of $19.7 billion and more than 100 plants in 29 countries.

But Hoover said the union, which in 2003 agreed to allow Goodyear to cut pay, pensions and healthcare and close an Alabama plant, had no choice but to strike.

Hundreds picketed outside Goodyear's sprawling headquarters in Akron, carrying placards that read "USW Local 2L on strike against Goodyear Tire & Rubber for unfair labor practices."

"They're trying to work us for a 40% cut in pay," said Al Tomasello, 64, who has worked at the Dunlop plant in Tonawanda, N.Y., for nine years.

Rick Niekamp, vice president of the Local 200 at Goodyear's plant in St. Marys, Ohio, said the company's most recent offer included wage cuts and a two-year freeze on pensions. The union also was unhappy with the healthcare offer for workers and future retirees.

Without giving details, Goodyear said it believed its final offer protected jobs and secured pensions. The union failed to agree to terms found in Steelworkers contracts with other tire makers that the company believed were necessary to survive in the global economy, the company said.

"We simply cannot accept a contract that knowingly creates a competitive disadvantage versus our foreign-owned competition and increases our cost disadvantage versus imports," said Jim Allen, Goodyear's chief negotiator.

The union said it represented 15,000 employees in Alabama, Kansas, Ohio, Nebraska, New York, North Carolina, Tennessee, Texas, Virginia, Wisconsin and at four plants in Collingwood, Toronto and Owen Sound in Canada.

By the company's count, the 12 U.S. plants have about 12,600 employees represented by the Steelworkers.

Goodyear shares closed down 5 cents at $14.24.

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