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Goodyear Tyre & Rubber Co. has set a Friday deadline for reaching a tentative labour agreement with its largest union, the United Steelworkers of America, a spokesman for the union told the Reuters news agency on Thursday.

Goodyear, which has been in negotiations with the steelworkers for five months, told union leaders on Wednesday that it will move forward with unspecified plans to secure the company’s future if a deal is not struck by midday Friday (5pm GMT), the union reportedly said.

“They want a tentative agreement sometime tomorrow or they are taking an action,” United Steelworkers spokesman Wayne Ranick told Reuters, though he declined to speculate on the company’s plans.

The news agency noted that the Akron, Ohio- based tyre maker has lost $US1.3 billion in the past two years and is expected to lose money again this year.

Goodyear and the steelworkers have been unable to reach a compromise on key issues of job security, financial restructuring and health care for current and retired employees, Reuters said, adding that the United Steelworkers represents nearly 19,000 Goodyear employees at 14 US plants as well as 22,000 retirees.

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According to Reuters, Goodyear told investors in late April that it plans to cut costs by about $1 billion to $1.5 billion by 2005 in order to turn around the company and, as part of that effort, it is seeking wage and benefit concessions from the union.

Contract negotiations with the union resumed last week after breaking off in late June when the two sides failed to meet an earlier deadline for an agreement, the news agency said.

“The bargaining continues pretty much day and night,” Ranick reportedly said. “We’re committed to doing what it takes to reach a fair and final settlement. Some progress is being made, but there are still critical issues on the table.”

Reuters said labour contracts expired on April 19 at plants that make Goodyear and Dunlop tyres and ended on July 5 at those that make Kelly-Springfield tyres but the previous labour agreements have been extended on a day-to-day basis since then, although either side can end that with 72 hours’ notice.

Reuters said the company has already eliminated its dividend, stopped matching 401(k) retirement plan contributions, refinanced loans and put its chemicals unit up for sale.