Goodyear and union reach tentative three-year contract
Thursday, August 21st 2003, 12:00 am
By: News On 6
CINCINNATI (AP) _ Goodyear Tire & Rubber Co. shares rose more than 8 percent Thursday after the company and the United Steelworkers of America agreed to a tentative three-year contract, reducing the threat of a strike at the struggling company.
After a weekend of all-night bargaining sessions and five months of negotiations, the two sides said Wednesday they found common ground on job security and health care issues for workers while leaving enough financial room for Goodyear to reorganize its business.
The union said its members must vote on the contract before it is ratified.
Goodyear share rose 54 cents to $6.84 in morning trading Thursday on the New York Stock Exchange.
The Akron-based company's contract with the union expired April 19 but had been extended. It covered 16,000 employees at 14 plants in Ohio, Virginia, North Carolina, Illinois, Alabama, Nebraska, Wisconsin, New York, Kansas, Texas and Tennessee.
The sides had traded several proposals and counterproposals since negotiating began in March as the union's patience waned. It said it was prepared to strike and this month insisted a contract be ironed out within days, not weeks.
The latest round of talks began earlier this month when the union offered a counterproposal officials said was stronger in health care benefits for workers and retirees than what the company had offered Aug. 6.
Before last weekend's session in Cincinnati, Goodyear said it needed leeway on job security and health care demands so it could compete in the marketplace. The union rejected the company's proposals to cut jobs and health benefits to save money.
``We obviously addressed many of our job security issues and health care issues within the context of knowing that this is a company facing very difficult times financially,'' said union spokesman Wayne Ranick.
He said he couldn't discuss contract details until the union votes on ratification sometime in the next couple of weeks.
Goodyear said the contract would allow it to address its recent poor performance.
``We've said all along that the agreement must provide Goodyear with the financial flexibility and capability necessary to support our turnaround plan,'' said Goodyear spokesman Chuck Sinclair. ``This agreement does.''
Sinclair also declined to discuss details until the union votes.
The rubber industry is suffering from worldwide overcapacity and weak demand. Goodyear has talked about closing two or three U.S. plants.
Goodyear reported a record $1.1 billion annual loss for fiscal 2002. It has announced a turnaround plan that includes reducing costs by $1 billion to $1.5 billion by the end of 2005 and possibly selling some of its non-tire businesses.
The company makes tires, engineered rubber products and chemicals at more than 90 plants in 28 countries. It employs about 92,000 people.