Detroit’s “Big Three” carmakers are casting an eye on the contract signed between Goodyear Tire & Rubber Co. and the United Steelworkers union at the end of last year as a potential model to emulate. Of particular interest is the trust fund the company set up to separate themselves from the responsibility of future retiree health costs.
(Akron/Tire Review) Master contract talks between the United Steelworkers and Bridgestone/Firestone North American Tire (BFNAT) will start later this month in St. Louis, according to USW Local 1155 President Ron Vining. Local 1155 represents workers at BFNAT’s Warren County, Tenn., radial truck tire plant.
In a letter to Local 1155 members, Vining said union negotiators will be in St. Louis Jan. 18-19 to review the recently ratified Goodyear-USW contract, with formal talks with BFNAT set to start Jan. 30.
Under the new labour agreement to emerge in the wake of the USW strike, Goodyear Tire & Rubber Co. will cut starting pay for newly hired workers in the U.S. by 35 per cent to US$13 per hour.
Chief Executive Officer Robert Keegan gave details the new wage rate in a conference call, Goodyear’s first discussion of the contract since the 29 December announcement that the United Steelworkers union members had given their approval.
Goodyear Tire & Rubber Co. chief financial officer Richard Kramer has announced that the company will continue to “attack high-cost factories” as part of its programme to lower its worldwide operating costs.
Moody’s Investors Service has revised its rating for Goodyear Tire & Rubber Co. from negative to stable following the signing of the new three-year USW contract. This move comes days after Standard & Poors upgraded Goodyear to a B+ rating.
In a statement, a representative of the investment service said “Moody’s would expect the company over time to achieve significant efficiencies from the new contract and other restructuring actions.” Given Goodyear’s stable outlook it is unlikely that their rating will be lowered again during the next 12 to 18 months.
The Goodyear Tire and Rubber Company have disclosed that the three-month USW strike cost them more than US$30 million a week.
Leading company executives said that Goodyear will continue to feel the strike’s financial impact through to the middle of the year, but the company has nevertheless achieved its goal of cutting costs.
Goodyear hopes to save US$610 million over a three-year period through the contract agreement that ended the strike.
With the hostilities between Goodyear and the USW now officially over, Standard & Poor’s have affirmed the B+ rating on Goodyear’s corporate credit and removed the company’s debt from negative CreditWatch.
The company was placed on CreditWatch in mid October 2006 due to the threat of business disruption and uncertain earnings during the strike period. Goodyear has a total debt of approximately US$12 billion.
Goodyear Tire & Rubber share prices leapt to a 52 week high in the first week of January following the announcement of the company’s revised credit status.
Some returning Goodyear strikers are feeling less than charitable towards their employer after reporting that their lockers at the factory had been tampered with during their absence and the contents taken or thrown away. In the words of Christine Lopez, a Goodyear employee, “You feel like you’ve been violated with your own personal belongings. Whether it’s Goodyear property or your own property, it’s property that you use while you’re at work.”
Not all employees have reported such incidents, and while USW officials say they are concerned, they state that the local contract agreements are their number one priority now everyone has returned to work.
With the USW strike now just an unpleasant memory for Goodyear, the tyremaker is boosting production to make up for any shortfalls in supply. The eleven week strike, which affected approximately 15,000 workers across North America, came to an end on December 22 after an agreement was reached between Goodyear and the United Steelworkers union. Workers began returning to work on January 2.
Goodyear has planned for a full supply of tyres to become available soon after the return of their hourly workers, with Jon Rich, president of Goodyear’s North American tyre unit stating “I have no doubt our associates will quickly return to their normal high levels of performance and productivity.”
With very little real information coming out of the negotiations between Goodyear and the USW, word of both positive and negative progress has filtered through the ranks of both parties’ supporters.
USW union leaders have reportedly commented that, despite the latest round of talks, Goodyear and the USW still have little common ground on the key issues behind the ongoing strike at Goodyear’s North American plants. A union spokesperson said that talks will continue, but added that when it comes to the future of the Tyler plant, the company has not deviated much from it’s original stance.
Both Goodyear and the United Steelworkers Union have remained tight-lipped following negotiations conducted on December 18. The two parties met in a Pittsburgh hotel for the first formal talks in more than a month, and according to a union spokesperson, Goodyear made a presentation and USW negotiators took some time to review Goodyear’s information.
According to USW union officials some striking Goodyear workers may yet return to the company’s Topeka plant to build Humvee tyres for the US military. However the union insists that Goodyear must fire the plant’s temporary workers before any such move is made.
Production of Humvee tyres at the Topeka factory has dropped by 35 per cent since the strike began, creating a shortage for the military.
Members of the United Steelworkers Union have scheduled a National Day of Action on December 16 with the aim of bringing the core issues behind its ongoing Goodyear strike into greater public awareness. While the planned action appears to be restricted to an orderly leaflet distribution campaign at 127 American stores that sell Goodyear tyres, the union hopes to prick the nation’s conscience with details of employee grievances.
(Akron/Tire Review) According to Associated Press reports, Goodyear officials said that “hundreds” of striking United Steelworkers employees have returned to their jobs at Goodyear plants. USW locals, however, dispute that assessment. A Goodyear spokesman told the AP that production levels at struck plants are increasing as strikers return to work and the company hires additional temporary workers. Some 16,500 workers at 16 of Goodyear’s North American plants have been on strike since 5 October. No master contract negotiations have been held since talks broke off in mid-November.
The United Steelworkers union have called for international support and solidarity from their overseas counterparts during their ongoing dispute with tyremaker Goodyear. The USW has recently forged strategic alliances with unions in Mexico, Brazil, Germany and Australia in order to support each other during disputes with common employers and to increase their bargaining power through coordination.
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