AKRON, OH — Talks between Goodyear and the United Steelworkers have apparently broken off after the union rejected the tiremaker’s last offer yesterday morning and opted to go on strike. The strike affects 16 Goodyear facilities in North America.
Goodyear plants on strike include eight North American tire plants, four U.S. and three Canadian engineered product plants, and two logistics and retread facilities in Canada.
According to reports, Goodyear’s last offer left it room to close two tire plants in the U.S. – reportedly the company’s Tyler, TX, and Gadsden, AL, facilities – while providing for capital investment in the other facilities and some form of protection for other union plants.
Meanwhile, Goodyear has implemented its “contingency plans,” which include staffing the struck plants with salaried workers and increasing importation of Goodyear tires from overseas plants. The company said it will be able to meet customer demand from built-up inventory and continuing production.
Softness in the North American consumer tire market in the first half of the year will also help Goodyear, analysts said. Through the first six months of 2006, passenger and light truck/SUV tire shipments were down 6 percent to 7 percent compared to the same period in 2005, leading to excess inventories for all tiremakers.
However, both the medium truck tire and OTR tire markets remain tight, with little excess inventory available to offset lost production due to a strike. In addition, Goodyear’s race tire production facility in Akron is one of the plants on strike, which could hamper NASCAR racing events.
According to one news report, the USW negotiating team has left Cincinnati, where the two sides have been bargaining since June. “Basically, our bargaining team is headed home,” USW spokesman Wayne Ranick said. “There are no meetings planned. Basically, it’s coming down to plant protection. That’s where the line is drawn.”
In a prepared statement, Goodyear said the “union rejected a comprehensive proposal from Goodyear that would improve its competitive position while maintaining substantial commitment to manufacturing in North America. Negotiations stalled after the union’s proposals to Goodyear did not include key items found in their agreements with competitors.”
Goodyear said its “final offer to the union” included “provisions for job security and significant investments for USW-represented plants going forward, a company-funded plan to secure retiree medical benefits and restoration of prior pension service credit.”
It did not, however, include plans to maintain all of its 16 unionized plants.
“The company left us with no option,” said USW Executive Vice President Ron Hoover. “We cannot allow additional plant closures after the sacrifices we made three years ago to help this company survive.
“Closing more plants would not only cause additional job losses and devastate the communities where the operations would cease, but it would also threaten the long-term viability of Goodyear,” Hoover said.
For its part, Goodyear maintained that it needed to improve its competitive position and maintain a “substantial commitment to manufacturing in North America.”
Goodyear chief negotiator Jim Allen said, “We simply cannot accept a contract that knowingly creates a competitive disadvantage vs. our foreign-owned competition and increases our cost disadvantage vs. imports.”
With regard to Goodyear’s reported plan to close two plants, the union said, “You can’t build long-term viability by continuing to give up marketshare.”
“Your Bargaining Committee has made every effort to achieve a fair and equitable contract without a work stoppage,” said a union statement. “As we go forward, we know we can count on the support of our membership and we will, at the end of the day, obtain a contract that is fair and equitable.”
From TireReview.com, a sister publication of aftermarketNews.
