Union City Associates Approve Goodyear Buyout

Weakley County Press, May 11, 2009

Special to The Messenger
Union workers at the Good-year-Union City plant voted overwhelmingly in favor of an agreement between the company and United Steelworkers Local 878 which proposed a “buyout” of at least 600 associates during its first phase of initiation. The agreement also states the local tire manufacturing facility would no longer be protected under Letter 53 of a master contract and may be closed.

In a letter dated April 24 to Local 878 president Harry Alford, a proposal was offered to local union associates that highlights three potential “phases” of a workforce reduction at the Union City Goodyear plant. Local 878 members cast their votes Friday and Saturday, with 94 percent voting in favor of the buyout agreement.

“This agreement was to give the Union City plant a chance to survive. They were considering closing the plant and with this agreement, if things pick up in the next two years, it will have a good chance to survive,” USW Local 878 communications director Willis Hicks said.
Hicks added the company will put out information to its associates concerning how many buyouts would be available and the number of employees who would fall into a workforce reduction.

Union City Goodyear communications manager Jimmy Cagle, who will leave Union City for the Lawton, Okla., plant next week after more than 20 years at the local plant, said, “We are pleased the membership of USW Local 878L has voted to support the tentative agreement. The change is in response to continued lower demand for consumer passenger and light truck tires and current economic conditions.”

“We will now begin work to implement the agreement and continue to drive improvement activities for our operations,” said Union City plant manager Todd Turner.

Goodyear-Union City currently employs about 2,600 team members, according to Cagle.

The terms of the proposal state under Phase 1 of the agreement that the plant has the right to make an initial ticket reduction and/or conversion to a five-day conventional schedule. Goodyear-Union City announced last week the plant plans to move its production schedule to three eight-hour shifts, five days a week — Monday through Friday — on July 6 after the July 4 holiday shutdown.

The plant issued a 60-day notice of possible intentions to move to an eight-hour conventional production schedule in February. Currently, Goodyear operates seven days a week, 24 hours a day on 12-hour shifts.

Included in Phase 1 of the agreement is the buyout of 600 Goodyear associates, including 60 technical maintenance by classification, at $3,000 per year of service with no cap. Those eligible under a Phase 1 buyout include associates with a minimum six months of service.

Under the agreement, “Employees on Occupational/Non-Occupational Leave of Absence or on layoff will be offered buyouts only in Phase 1 and only if an insufficient number of buyouts have been accepted after they have been offered to all other employees.”

Goodyear associates will have the option of accepting buyouts at $3,000 per year of service or being placed on layoff with existing rights and benefits under Phase 1, according to the agreement.

As an incentive to senior associates between the ages of 53 and 55 with at least 28 years of service as of June 1 of this year who choose the buyout during Phase 1 may elect voluntary layoff and may remain on layoff status without recall rights until they reach the necessary retirement criteria of age 55 and 30 years of service. They will then be required to retire under the terms of the Pension, Insurance and Service Award Agreements in effect at that time as highlighted in the buyout proposal.

The agreement also stipulates Phase 2 criteria in the event subsequent ticket reductions are made at the Goodyear plant prior to announced plant closure.

Under Phase 2 of the agreement, 400 buyouts would be offered at $2,000 for each year of service at the plant, with no cap.

Phase 3 of the agreement states that in the event of an announced plant closure, employees who did not leave during Phases 1 or 2 would have the option of accepting a $25,000 lump sum one-time payment or preferential hire rights, SUB and SIC pays, as well as medical and other benefits according to plant closure provisions of the Pension and Insurance Agreement.

Any associate who opts to take a layoff during Phase 2 or 3 of the agreement will be eligible to receive $250 a week for a maximum of 84 weeks. According to the agreement, buyouts will be paid as a lump sum after the associate’s exit and will be subject to federal, state or local payroll taxes including a deduction of Union dues.

A reduced demand for replacement tires coupled with declining auto sales have impacted production at several Goodyear plants during the course of the last 12 months.

In August 2008, four North American Goodyear tire plants announced reduced consumer tire production by 8 million tires last year. Goodyear-Union City was among the four plants who experienced three production shutdowns during the last quarter of 2008 as a result of a declining passenger tire market.

USW Local 831 approved a similar buyout agreement with Goodyear Tire and Rubber Co. at its plant in Danville, Va., earlier this year.

The Danville plant reduced its production schedule from a 12-hour continuous operation to an eight-hour five-day-a-week schedule in late March, according to The Danville Register & Bee. Goodyear-Danville reportedly offered 200 buy outs at $2,000 per year of service with a cap at $40,000.

Clint Smith, corporate support communications manager in Goodyear’s global communications organization in Akron, has been named to replace Cagle.