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September 21, 2009

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Home » Business » Auto

Goodyear inks union contract to save plants

GOODYEAR Tire & Rubber Co workers approved a new contract that will prevent the potential closing of a half-dozen plants in the United States in the next four years, union leaders said on Saturday.

The United Steelworkers said the agreement covers about 10,300 workers. Voting concluded at seven plants late on Friday.

The contract requires minimum staffing levels at six of the seven Goodyear plants and prevents the company from shifting production to any facility not represented by the Steelworkers union. It also calls for Goodyear, based in Akron, Ohio, to invest US$600 million at the plants, keeping them up-to-date.

"This agreement reflects the commitment of Goodyear and the USW to continue to work together to achieve our common goal of world-class competitiveness," said Richard Kramer, Goodyear's chief operating officer.

The company planned to discuss the deal with investors during a conference call today.

Higher wages

The new contract includes wage and benefit increases, improved pensions for some workers, and continuation of previous cost-of-living provisions for all workers, according to the union.

The deal protects factories in Akron, Ohio; Gadsden, Alabama; Buffalo, New York; Topeka, Kansas; Danville, Virginia; and Fayetteville, North Carolina.

A plant in Union City, Tennessee, which employs about 1,700 workers, was the only one not protected. A local agreement negotiated in April provided for as many as 600 workers there to receive buyouts, according to the union.

Goodyear, the biggest US-based tire maker and third-largest globally, has said the agreement will improve the company's productivity and flexibility.

The company operates more than 60 plants in 25 countries and emloys nearly 70,000 employees.

Goodyear reported in July that it lost US$221 million in the second quarter as upheaval in the US auto industry and the global recession cut sales 25 percent from a year ago.

The company launched 19 new products in the second quarter, cut costs by another US$200 million and eliminated 1,700 jobs. The company sold 184.5 million tires last year, and plans to cut production by as many as 25 million tires in two years.


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