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Goodyear contract brings mixed emotions

Approval of a new labor contract by striking Goodyear Tire & Rubber Co. workers was met with mixed emotions -- from confidence from investors to apprehension from some workers who fear for the future of their jobs with the world's third largest tiremaker.

About 10,000 of 14,000 striking United Steelworkers members from 12 Goodyear plants in 10 states voted Thursday on the three-year agreement, which includes plans to close a Texas tire factory but creates a $1 billion health care fund for retirees.

The contract was approved by all locals and by the overall membership by a 2-to-1 margin, the union said Friday. The contract needed to be approved by a majority of the locals -- seven out of 12 -- plus a majority of the voters.

The vote means an end to the strike that began Oct. 5. and a return to work beginning Tuesday.

Goodyear shares hit their highest level in a year Friday, closing up 98 cents, or nearly 5 percent, to $20.99 on the New York Stock Exchange. The previous high of $20.38 was reached Tuesday after word that the company had reached a tentative deal with the union. The year's low was $9.75.

Goodyear chief executive Robert Keegan said the pact will help the company significantly reduce its costs, making it a stronger global competitor and employer.

Company spokesman Ed Markey said Friday that the agreement means a chance at a bright future.
"Our goal was to reach a fair agreement that enhanced our ability to be competitive and this agreement does that," he said.

USW executive vice president Ron Hoover said the company's commitment in the contract to invest $550 million in union-covered U.S. plants over the next three years "secures our jobs for the future."

But some rank-and-file workers said they're anxious about what lies ahead, including worries about job security and fear that the retirement health care fund will be underfunded.

"That is probably the biggest question out there. They (Goodyear management) are committed to putting $550 million into the plants. We'll see. We hope we're dealing with honorable people," said Dave Prentice, a worker on temporary assignment with USW Local 2L in Akron.

Arthur Kielec, a seven-year employee at Goodyear-Dunlop in Tonawanda, N.Y., said some are nervous about foreign competition.

"They tell us, how can we compete against people who are making 50 cents an hour?" he said.

The new contract creates a wage range of $13 per hour to $24 per hour, a cut in starting pay for new employees but a protection of pay for current workers. There were no raises but the deal allows for cost of living increases for hourly workers.

USW Local 307 vice president Glen Griffith in Topeka, Kan., said workers there who make tires for trucks and earth movers are confident Goodyear will invest in their plant by adding new equipment, technology and making other improvements that may avoid cuts, at least through the life of the contract.

"We have strong demand for the products we produce," Griffith said. "We feel pretty secure at this point."

The contract allows the tiremaker to close a plant in Tyler, Texas, in 2008, provided Goodyear closes a nonunion plant first. About 1,100 Tyler workers who make unprofitable wholesale private label tires are eligible for buyouts of up to $40,000, plus two years' health benefits.

Goodyear agreed to put $1 billion in cash and stock into the fund for retired union workers' medical benefits, higher than the company's previous $660 million offer but less than the union's call for roughly double that amount.

John Russo, a labor studies professor at Youngstown State University, said anxiety among workers and retirees is understandable considering the evolving global economy and the Voluntary Employees' Beneficiary Association health care fund for retirees, which requires court approval.

"VEBAs are relatively new and people are rather uncertain about them," Russo said.

Russo said it also remains to be seen how Goodyear will use the money it saves from closing Tyler and other cuts. Besides investing in U.S. factories, he said it's likely the company will continue investing in overseas plants -- Goodyear has about 80,000 employees in 29 countries.

"That will make the next negotiations even more difficult," Russo said.

"And the unspoken part of this is the age of that work force. The age of that work force is pretty old and the result of that is there will be more and more retirees coming on board," Russo said. That could mean Goodyear will not replace those workers, effectively resulting in more U.S. downsizing, he said.

Workers at four Goodyear plants in Ontario, where about 400 union members are striking, were voting Friday on a separate company proposal.

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Associated Press writers Elizabeth Dunbar in Raleigh, N.C.; Carolyn Thompson in Buffalo, N.Y.; Andale Gross in Kansas City and Joe Milicia in Cleveland contributed to this report.

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On the Net:

Union: http://www.gkdsolidarityexpress.org

Goodyear: http://www.goodyearnegotiations.com

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2006-12-31 18:19:6

Goodyear contract brings mixed emotions

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