Goodyear Union Workers Prepare For Long Strike
Posted October 8, 2006 2:06 a.m. EDT
AKRON, Ohio — Legend has it you used to be able to smell the rubber in this blue-collar city, home to the world's third largest tiremaker.
But these days the most noticeable scent near Goodyear Tire & Rubber Co.'s hulking headquarters is the smoky smell of wood burning in metal barrels that keep striking workers warm from the unusually chilly fall air.
As far as the pickets here, in North Carolina and other states are concerned, they might be out there a long time.
As of Saturday, no new talks had been scheduled between the company and the United Steelworkers union.
Analysts say the strike could cost Goodyear, which is on fragile financial ground after five years of losses, $2 million a day. Consumers shouldn't see tire prices rise unless the strike is lengthy, according to analysts, who also say the company could save $50 million a year by closing a U.S. plant.
The union says shuttering plants is not negotiable. Steelworkers say factories in Gadsden, Ala., and Tyler, Texas, are on a company closing list.
"We're in the beginning stages. We're in this for the long haul," said Eric Pirogowicz, 50. He predicted the strike would last weeks, if not months.
Pirogowicz has worked for Goodyear for 33 years, most recently making race car tires in Akron with 430 others. He's among more than 12,000 union members from 16 plants in the United States and Canada who walked off the job Thursday.
"A strike isn't a good thing," said Darryl Jackson, president of USW Local 959 in Fayetteville, N.C., where about 2,150 tire makers are striking. "But if we're forced into a fight, we're going to fight to keep what we have."
The United Steelworkers union and Goodyear have tried unsuccessfully since July to reach a labor deal.
Goodyear, which says it's maintaining production at nonunion plants and by depending on salaried employees and imports, says the union refused to agree to help the company remain competitive in a global economy. It says its latest offer protected jobs and provided for retiree medical benefits.
In documents posted on Goodyear's Web site, the company said it expects to be $2.2 billion short in covering pension obligations this year, even after contributing between $650 million and $875 million.
Several messages left with Goodyear officials were not immediately returned. On Thursday, the company said it wanted to get back to bargaining in Cincinnati. Union negotiators flew home.
Since workers agreed to closing a plant and cutting pay and other benefits in 2003, union members are not happy with the current proposal, which they say includes pay and other cuts, particularly after top executives got big bonuses this year.
Securities and Exchange Commission records show Goodyear CEO Robert J. Keegan collected a $2.6 million bonus last year, while the head of the company's North American tire division, Jonathan D. Rich, collected $680,000. CFO Richard Kramer got over $587,000, while senior VP and general counsel Thomas Havie got $560,000.
In 2003, Goodyear flirted with bankruptcy, losing more than $1 billion, taking on billions in debt and seeing its shares dive from $20 in 2002 to below $4 on the New York Stock Exchange.
It returned to profitability for the first time since 2000 this year and its stock has rebounded. Shares closed at $14.46 Friday.
But Keegan has steadily warned that the turnaround was not complete and looming labor, material and retiree costs and other issues threatened future profits.
Goodyear ranks No. 3 in the world in tire sales, based on revenues, behind top-ranked Bridgestone and No. 2 Michelin, according to the trade publication Tire Business. The 108-year-old company had 2005 sales of $19.5 billion and more than 100 plants in 29 countries.
Rick Niekamp, vice president of USW Local 200 in St. Marys, Ohio, said workers feel betrayed after the 2003 concessions.
"We got to a decent spot where they could make profits, turned them around," he said. "They came back this time and tried to rake us over the coals like this. We can't take it. We can't handle this. We have to do what we have to do. Unfortunately -- hope it's a short one -- but we're on strike."