The Goodyear Tire & Rubber Co. has announced that its new labor contract with the United Steelworkers of America (USWA) meets the operational flexibility and cost-savings goals established prior to the negotiations.
"Our goal for these negotiations was to achieve what some thought was impossible: a fair agreement that contributed approximately $1 billion in cost savings and cost avoidance over its three-year term without a work stoppage," said Robert J. Keegan, Goodyear chairman and chief executive officer.
"Because of the many complex and delicate issues involved, this process took a considerable amount of time. But our patience and determination has been rewarded with a contract that is critical to drive our turnaround in North America."
The three-year pact covering workers at 14 tire and engineered products factories in the United States gives Goodyear the ability to eliminate high-cost manufacturing capacity, contain healthcare costs, source product globally and improve productivity. It also provides a framework for ongoing cooperation between the company and the USWA.
Keegan said the agreement breaks new ground in several important areas including:
-- containment and sharing of healthcare and prescription drug costs;
-- no increase in the company's retiree benefit liability caps;
-- a two-year moratorium on pension service credit;
-- no general wage increases;
-- clearly defined cost reduction and productivity improvement requirements at every plant;
-- and cooperation and consultation between Goodyear and the USWA on a broad range of issues, including debt reduction.
The ability to reduce high-cost manufacturing capacity in North America and leverage Goodyear's global sourcing capabilities was a significant accomplishment, according to Keegan.
As part of the new company-union partnership, Goodyear gave the USWA the right to nominate an individual for a seat on its board of directors, agreed to remain neutral should the union attempt to organize a non-union facility and said it will require that a buyer of any of its plants negotiate a labor agreement as a precondition of the sale.
"Our goal for these negotiations was to achieve what some thought was impossible: a fair agreement that contributed approximately $1 billion in cost savings and cost avoidance over its three-year term without a work stoppage," said Robert J. Keegan, Goodyear chairman and chief executive officer.
"Because of the many complex and delicate issues involved, this process took a considerable amount of time. But our patience and determination has been rewarded with a contract that is critical to drive our turnaround in North America."
The three-year pact covering workers at 14 tire and engineered products factories in the United States gives Goodyear the ability to eliminate high-cost manufacturing capacity, contain healthcare costs, source product globally and improve productivity. It also provides a framework for ongoing cooperation between the company and the USWA.
Keegan said the agreement breaks new ground in several important areas including:
-- containment and sharing of healthcare and prescription drug costs;
-- no increase in the company's retiree benefit liability caps;
-- a two-year moratorium on pension service credit;
-- no general wage increases;
-- clearly defined cost reduction and productivity improvement requirements at every plant;
-- and cooperation and consultation between Goodyear and the USWA on a broad range of issues, including debt reduction.
The ability to reduce high-cost manufacturing capacity in North America and leverage Goodyear's global sourcing capabilities was a significant accomplishment, according to Keegan.
As part of the new company-union partnership, Goodyear gave the USWA the right to nominate an individual for a seat on its board of directors, agreed to remain neutral should the union attempt to organize a non-union facility and said it will require that a buyer of any of its plants negotiate a labor agreement as a precondition of the sale.
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