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September 30, 2009

US: New union deal gives Goodyear flexibility, savings

A four-year master labour contract ratified by members of the United Steelworkers union on 18 September “achieves the company’s objectives and will help it to realize profitable growth by producing tyres in North America,” Goodyear Tyre & Rubber Company said.

A four-year master labour contract ratified by members of the United Steelworkers union on 18 September “achieves the company’s objectives and will help it to realize profitable growth by producing tyres in North America,” Goodyear Tyre & Rubber Company said.

The new contract enhances the competitiveness of its tyre plants through improvements in productivity, wage and benefit savings and added flexibility and will save about US$215m over the term of the contract.

Combined with savings from pre-bargain agreements to reduce staff at five plants, the company expects to achieve $555m in total savings over the term of the agreements.

The contract also provides for Goodyear to invest $600m 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, New York; Danville, Virginia; Fayetteville, North Carolina; Gadsden, Alabama; Topeka, Kansas; and Union City, Tennessee.

Goodyear has spent the past seven years attempting to alter past US union edicts in order to reduce excess capacity and cut worker costs amid a volatile market dominated by consolidation, increased import competition and higher raw material expenses, Dow Jones Newswires noted.

The company posted a US$221m net loss for the second quarter, compared with net income of $75m a year earlier as tyre industry sales fell in North America and around the world. The company has posted losses in two of the past three years.

The changes mean that, for example, a tyre builder will now be able to perform some maintenance on his own equipment rather than passing the job to a second worker as mandated by previous union rules. The move is expected to improve efficiency and eliminates time lost while waiting for a worker to respond to the problem, Dow Jones said.

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