State News

Tentative agreement covers Fayetteville Goodyear plant

Posted August 29, 2009 9:50 p.m. EDT
Updated August 30, 2009 8:54 a.m. EDT

— Fayetteville workers would be covered under a tentative agreement reached Saturday by Goodyear Tire & Rubber Co. (NYSE: GT) and the United Steelworkers of America to replace a national contract that had been extended twice during three months of negotiations.

The union and company said the agreement was reached about three hours before the old contract expired at midnight. Wayne Ranick, a spokesman with the union headquarters in Pittsburgh, said the deal was for four years.

Rank-and-file members will be briefed on the deal and take a ratification vote. 

The talks covered about 10,300 Steelworkers at seven Goodyear plants in Fayetteville; Danville, Va.; Akron, Ohio; Buffalo, N.Y.; Gadsden, Ala.; Topeka, Kan., and Union City, Tenn.

The Steelworkers had made job security their top priorities, while the goals of the Akron-based company were improved productivity and flexibility.

Jim Allen, the company's chief negotiator, said Goodyear had met its aims: "We are pleased that we have reached an agreement that accomplishes Goodyear's bargaining goals and helps secure the future for its U.S. factories."

Ranick said he couldn't provide any details on whether the agreement preserved union jobs or kept open the seven plants. He said union negotiators were mindful that a recession was the background to talks.

"They feel comfortable that in a difficult circumstance they were able to work with the company and get something that they feel comfortable enough to take home to the members and talk to them about it and let them vote on it," he said.

Goodyear's Fayetteville plant has been promised nearly $40 million in incentives by North Carolina, Cumberland County and the City of Fayetteville. The incentives are doled out in annual sums if Goodyear meets certain conditions.

The workers and plant were idled for about two weeks in August 2008 during a nationwide string of shutdowns to reduce inventory amid slipping sales.

Goodyear must employ at least 2,000 people, invest $200 million over a six-year period and maintain average wages that are 40 percent higher than the local average to qualify. The company loses a portion of annual grant as its overall employments falls. If employment slips by 20 percent, Goodyear would lose its entire grant.

In March, Goodyear said it had already invested more than $100. The plant employs about 3,000 people and makes about 30,000 tires a year.

Goodyear, the biggest U.S.-based tiremaker and third largest globally, operates more than 60 plants in 25 countries and has nearly 70,000 employees.

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

The loss excluding one-time items was half Wall Street's expectations, however, and Goodyear said it was seeing early indications of an economic turnaround.

The company launched 19 new products in the second quarter, cut costs by another $200 million and eliminated 1,700 jobs. Added to 3,800 first-quarter staff cuts, the company has passed its full-year goal of 5,000.