The Association of U S West Retirees



United Steelworkers Union Approves Goodyear Contract
Associated Press

The Wall Street Journal
Friday, December 29, 2006

AKRON, Ohio -- The union representing about 14,000 Goodyear Tire & Rubber Co. workers approved a new contract that includes plans to close a Texas tire factory and create a $1 billion health-care fund for retirees, the United Steelworkers said Friday.

USW union members from 12 plants in 10 states, including about 1,400 laid off and inactive workers, voted Thursday night on the three-year agreement reached last week.  The contract was approved by a two-to-one margin, the union said.  Exact totals were not released.  The contract needed to be approved by a majority of the locals, plus a majority of the voters.

The world's third-largest tire maker and the union reached the deal after both sides resumed talks in Pittsburgh last week.  The strike began Oct. 5.  Workers were expected to return to work beginning Tuesday, the union said.  Workers at four Goodyear plants in Ontario, Canada, where about 400 union members are striking at four plants, planned to vote Thursday and Friday on a separate proposal.

"It took a strike, but we achieved a fair and equitable contract that protects quality health care for active and retired members," USW Executive Vice President Ron Hoover said in a statement.  "And by winning major capital-investment expenditures, it secures our jobs for the future."

The contract would allow the tire maker to close a plant in Tyler, Texas, but not immediately.  It provides for a one-year transition period in which the workers will have the opportunity to take advantage of retirement buyouts.  The plant employs 1,100 workers who make unprofitable wholesale private-label tires.

Goodyear also agreed to put $1 billion into the fund for retired union workers' medical benefits, which was higher than its previous $660 million offer but less than the union's call for roughly double that amount.

The Akron, Ohio-based company said the contract would provide the company with the ability to achieve up to $610 million in cost savings over its term and $300 million a year in ongoing savings.  Compared with 2006 prestrike levels, savings are expected to total $70 million in 2007, $240 million in 2008 and $300 million in 2009, the company said.

The new contract covers tire and engineered product plants in Akron;  St. Marys, Ohio;  Marysville, Ohio;  Gadsden, Ala.;  Tonawanda, N.Y.;  Lincoln, Neb.;  Topeka, Kan.;  Fayetteville, N.C.;  Danville, Va.;  Tyler, Texas;  Sun Prairie, Wis.;  and Union City, Tenn.

--Dow Jones Newswires contributed to this article.