AKRON, Ohio -- The Goodyear Tire & Rubber Co. said today that the four-year master labor contract ratified by members of the United Steelworkers (USW) union on Sept. 18 will help the company realize profitable growth by producing tires in North America, in addition to achieving other objectives.

The new contract enhances the competitiveness of Goodyear's USW-represented tire plants through improvements in productivity, wage and benefit savings and added flexibility. These changes are expected to provide Goodyear with cost savings of approximately $215 million over the term of the contract. Combined with savings realized through pre-bargain agreements to reduce staffing levels at five plants, the company expects to realize $555 million in total savings over the term of the agreements.

"Although we have achieved significant cost savings, the new realities of our industry require that this agreement do more than simply hit a cost-cutting number," said Richard Kramer, Goodyear's chief operating officer and president, North American Tire.

"This innovative agreement can truly change the way we run these factories. We can improve our efficiency, flexibility and competitiveness in both the near-term and long-term, driving working capital improvements and allowing us to be more responsive to the needs of our customers."

Kramer said the 2009 agreements build on significant changes made in the 2003 and 2006 contracts and address the core issues impacting the competitiveness of the North American Tire business. The company agreed to make enhancements to a profit sharing plan that includes a cumulative cap of $175 million over five years and to increase the defined benefit pension multiplier for eligible associates. The contract also provides for Goodyear to invest $600 million over the next four years in its USW facilities to make them more efficient and productive. Additionally, it provides continued job security for six of the company's USW-represented manufacturing plants.

The seven plants covered by the master agreement are in: Akron, Ohio; Buffalo, N.Y.; Danville, Va.; Fayetteville, N.C.; Gadsden, Ala.; Topeka, Kan.; and Union City, Tenn.