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No Quick End Seen to Strike at Goodyear

Analysts say the labor dispute may cost the firm $2 million a day, with no new talks set.

October 09, 2006|Connie Mabin | The Associated Press

AKRON, Ohio — Legend has it you used to be able to smell the rubber in this blue-collar city, home to the world's third-largest tire maker.

But these days the most noticeable scent near Goodyear Tire & Rubber Co.'s headquarters is the smell of wood burning in metal barrels that keep striking workers warm from the unusually chilly fall air.

They might be out there a long time. No new talks have been scheduled between the company and the union.

"We're in the beginning stages. We're in this for the long haul," said Eric Pirogowicz, 50, a 33-year Goodyear employee who most recently made race car tires in Akron and was among more than 12,000 union members from 16 plants in the United States and Canada who went on strike Thursday.

Analysts say the strike could cost Goodyear, which is on fragile financial ground after five years of losses, $2 million a day.

Consumers shouldn't see tire prices rise unless the strike is lengthy, analysts said.

The union says factories in Gadsden, Ala., and Tyler, Texas, are on a company closing list, but that shuttering plants is not negotiable.

Analysts say the company could save $50 million a year by closing a U.S. plant.

"A strike isn't a good thing," said Darryl Jackson, president of the union's Local 959 in Fayetteville, N.C. "But if we're forced into a fight, we're going to fight to keep what we have."

The union and Goodyear have tried unsuccessfully since July to reach a labor deal.

Goodyear, the third-largest tire maker behind top-ranked Bridgestone Corp. and Michelin, says it is maintaining production at nonunion plants while also using salaried employees and imports. It says the union refused to agree to help the company remain competitive in a global economy and that its latest offer protected jobs and provided for retiree medical benefits.

Because workers agreed to closing a plant and cutting pay and other benefits in 2003, union members are not happy with the current proposal, which they say includes pay and other cuts, particularly after top executives received big bonuses this year.

Securities and Exchange Commission records show Goodyear CEO Robert J. Keegan collected a $2.6-million bonus last year, while the head of the company's North American tire division, Jonathan D. Rich, collected $680,000.

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