Goodyear, Steelworkers Bargain During Tough Economy

The Buffalo News, June 23, 2009

Contract negotiations will affect local tire plant in Tonawanda, which has over 900 hourly workers

Goodyear Tire & Rubber and the United Steelworkers are negotiating a new contract — talks that will have a local impact.

The Goodyear Dunlop Tires North America plant on Sheridan Drive in the Town of Tonawanda is one of seven U. S. facilities covered by the bargaining, with a combined total of 10,300 workers. The current three-year labor agreement expires July 18.

The local plant makes tires for passenger cars, commercial trucks and motorcycles. It has already has felt the effects of the economic downturn and the company’s push to reduce costs, cutting almost 150 jobs late last year through buyouts and layoffs.

The existing national agreement did not come about easily. In 2006, the Steelworkers went on strike for three months before approving a deal. This time, the two sides are bargaining amid a recession, with auto sales stuck in a slump.

Wayne Ranick, a spokesman for the Pittsburgh-based Steelworkers, said he believes the talks will go more smoothly this time.

A major point of contention, involving retiree health care, was resolved in the last round of talks, he said, and both sides are cognizant of the current economic climate.

Ranick said the union’s priorities are jobs and keeping the plants operating, along with ensuring adequate capital investment in the facilities. “That sort of all goes together,” he said.
Goodyear says it has to control costs so that the company remains competitive in a global marketplace. The tire maker identifies four key issues in the talks: productivity, flexibility, pensions and benefits.

By flexibility, the company says it means its plants “must have workers in the right place, at the right time, producing the right products at the right cost.”

Goodyear in December 2008 froze its defined pension benefit plans for its U. S. salaried workers, but not its hourly workers. It says its pension plans are “significantly underfunded,” following declines in interest rates and pension asset values.

In remarks to the bargaining teams at the start of talks in Cincinnati, Goodyear executive Rich Kramer cited the economic climate and the fact that the company’s North American business lost $189 million in the first quarter as major challenges.

Kramer, who is chief operating officer and president of North American Tire, said Goodyear’s goal is “profitable growth by building tires in North America.” The company will never be the low-cost manufacturer of tires, he said, so it must find ways to improve efficiency.

The Tonawanda tire plant has 948 hourly workers represented by the Steelworkers, along with 152 salaried workers, said Diane Zwirecki, a spokeswoman at the plant. An additional 40 salaried employees work at offices in Amherst, for a combined work force of 1,140.

The manufacturing plant produces an average of 5,500 motorcycle tires, 4,200 passenger tires and 2,000 truck tires per day, Zwirecki said.