Choice of Plant Upsets Steel Workers Union

Goodyear Tire & Rubber Co. may have violated its contract with the United Steelworkers of America by deciding to build a new line of passenger tires at a nonunion plant in Lawton, Okla., the union said. But the Akron tire maker denies it has broken the contract, and said it has no plans to move production of its new Assurance all-season radial tires to a union factory. The disagreement comes just five months after the two sides signed a new three-year contract, following months of tense bargaining that threatened to escalate several times into a strike or lockout.

From Akron Beacon Journal

LAWTON, OK — Goodyear Tire & Rubber Co. may have violated its contract with the United Steelworkers of America by deciding to build a new line of passenger tires at a nonunion plant in Lawton, Okla., the union said.

But the Akron tire maker denies it has broken the contract, and said it has no plans to move production of its new Assurance all-season radial tires to a union factory.

The disagreement comes just five months after the two sides signed a new three-year contract, following months of tense bargaining that threatened to escalate several times into a strike or lockout.

The contract allows Goodyear to save more than $1 billion on wages, health care and benefits. In exchange, the union said it won job security for thousands of hourly workers.

The union said it wants an explanation of how Goodyear chose a nonunion plant to produce the Assurance line, which the company introduced to dealers and employees with great fanfare earlier this month. The tires will go on sale this spring.

“The company’s announcement significantly undercuts the good will and cooperation that is the basis of the contract ratified by our members last September,” Andrew V. Palm, an international vice president with the Pittsburgh-based union, said in a statement.

The contract requires Goodyear to give Steelworker-represented plants “meaningful and significant first consideration and preference” for new products for sale in North America, as long as the unionized plants have the necessary capacity “without incurring a materially greater level of capital expenditures.”

Goodyear spokesman Chuck Sinclair said the company’s decision to build the Assurance tires in Lawton “is in complete compliance with our labor agreement.”

He said he did not know whether the company considered other plants, or why Lawton was chosen.

“We remain committed to our ongoing relationship with the United Steelworkers of America,” he said.

But the company is already on thin ice with the union. The contract gave the union the right to strike if Goodyear did not refinance its debt with $350 million worth of new stock and bond offerings by the end of last year.

Goodyear was unable to meet the deadline, saying it discovered accounting irregularities that forced it to restate nearly five years worth of results. Its investigation into accounting irregularities is continuing, and federal regulators have launched a formal investigation.

“We are deeply concerned that this announcement (to build Assurance tires in Lawton) came without any discussion or notice, particularly given our patience and understanding regarding the company’s slow progress on their promised financial restructuring,” Palm said.

The union said it wants to hear the company’s response to the Lawton issue before discussing possible options, including a strike.

The Steelworkers represent about 19,000 workers at 13 Goodyear factories in the U.S. and Canada.

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