From Akron Beacon Journal

AKRON, OHIO -- Early next month, when Goodyear Tire & Rubber Co. executives and the United Steelworkers of America exchange contract proposals, job security looks to be a major issue.

But defining job security depends on the perspective of the company and the union. The current three-year contract between Goodyear and its estimated 13,000 Steelworkers employees -- out of about 80,000 Goodyear employees globally -- was signed during some of the Akron tire maker's darkest days. The contract expires July 22.

"These negotiations are clearly important because we need to have more productive and more competitive U.S. plants," Robert Keegan, Goodyear's chairman and chief executive officer, said in a conference call with industry analysts Thursday. "We certainly anticipate that will be the outcome."

When the Steelworkers ratified the 2003 contract, Goodyear was hemorrhaging money after its business strategies went awry. Goodyear was in the early stages of implementing companywide changes. The Steelworkers contract reflected those times and, among other things, called for the company to invest in its U.S. plants. It also gave the union a seat on Goodyear's board.

Now, Goodyear is profitable again and riding the success of high-margin tires largely made in the United States. Keegan and other company executives have said that although Goodyear has turned around, more needs to be done, including closing high-cost plants, though not necessarily union facilities. Goodyear plans to close a high-cost plant in Great Britain this year as part of its plan to save $150 million a year by the end of 2008.

Michelin's B.F. Goodrich division and Bridgestone Firestone, which also will be negotiating contracts with the Steelworkers this year, have said they intend to close high-cost plants in North America.

"Goodyear and the Steelworkers are on track to commence negotiations in June for a new master agreement," North America Tire division spokesman Ed Markey said in a statement. "We are confident that those negotiations will produce an agreement that is fair to all stakeholders and enhances Goodyear's ability to win with customers in today's intensely competitive global market place."

The Steelworkers, meanwhile, will be seeking to improve their members' financial health.

The contract talks will take place at a time when Goodyear, like many U.S. companies, is struggling with high health care costs, underfunded pension obligations and relentless global competition. Unions, meanwhile, are fighting to retain membership that has been steadily declining in the private sector, particularly in manufacturing, for decades.

At Goodyear's annual dealers' conference, held this year in Nashville, Jon Rich, president of the North America Tire division, said a new contract will have to improve Goodyear's global competitiveness while also being fair to current and past union workers.

"We are going to do everything we can to put customers first," he said. "That's where the (job) security is."

Steelworkers have said they want to eliminate the outsourcing of bargaining unit work, protect union members if a plant is sold, reduce the amount of overtime and ensure capital investment in plants.

"We're going to strengthen our job security provisions and protect our retiree medical provisions," said Ron Hoover, Steelworkers executive vice president and contract negotiator. He is a former member of the United Rubber Workers, which merged with the Steelworkers in 1995.

Goodyear is now on a "good short-term recovery path," Hoover said. "It means we don't have to walk that tightrope we walked in 2003."

If the Steelworkers had decided to strike Goodyear in 2003, that likely would have put the company in Chapter 11 bankruptcy, Hoover said. The union negotiated specific plant productivity improvements, and Hoover said with proper capital expenditures all of the plants are good producers.

"I think 2003 was pivotal," Hoover said. "They've been doing well with the 2003 contract. They're bringing out new products."

Hoover described relations between the union and Goodyear as cordial. The union also will exchange proposals with Bridgestone Firestone and Goodrich in early June, he said.

By late June or early July, the Steelworkers will decided which of the tire makers will be its "target" company, Hoover said.

"We do engage in pattern bargaining," Steelworkers spokesman Wayne Ranick said. "That's usually (decided) after negotiating has begun."

Copyright 2006 The Akron Beacon Journal. All Rights Reserved.

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