Steelworkers Union Approves Goodyear Contract
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
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
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.