Goodyear and Union Begin Contract Negotiation

June 9, 2009 – 6:25 pm – No Comment

Goodyear Tire & Rubber Company opened contract talks with the United Steelworkers of America yesterday, though the economy is still in a recession, and with the history of a three-month strike in 2006. (The strike, which began with a spirited walkout, ended when both groups agreed to create an independent health care fund to pay for health benefits of USW retirees.) The current contract between the two expires on July 18, has encompassed three years, and covers over 10,000 steelworkers.

The United Steelworkers of America said that they want to walk away from the table with improved pay and benefits along with negotiated job security. Goodyear, on the other hand, said that they are most focused on cost control. “Goodyear’s goal for its North American Tire manufacturing operations is to be competitive within North America and with the rest of the world,” Goodyear said in a released statement.

Goodyear’s chief executive, Bob Keegan, has indicated that they plan to cut 5,000 jobs internationally in 2009, including 3,800 cuts made earlier this year. Goodyear currently employs over 71,000 employees internationally, 30,000 of which are employed with them in the US. Goodyear’s salaried pension plans were frozen at the end of 2008, releasing a statement that the company “has experienced periods of declines in interest rates and pension asset values,” which has left a serious funding gap in pension plans.

This shows that the company is not in the position to go around spending more money, making cost cutting a very important factor in these negotiations. On the other hand, the United Steelworkers of America have a duty to bring their members the best pay, benefits, and job security possible, regardless of exterior situations. It will be interesting to see what kind of agreement they can come up with and how this plays out. It is capitalism at its finest, something we are at a lack of in the days of pseudo-socialism. There is a lot to be said about a union and a large production company sitting down at the proverbial negotiation table with optimism and the desire to compromise.

Kevin Johnsen, a contract coordinator with the Steelworkers, said they are primarily concerned with job security, understandable in an era of pink slips and high unemployment rates due to the economy. It is only natural they would begin dialogue protecting workers from layoffs and pay cuts in the event of another economic downturn. “We’re interested in getting a fair and equitable contract. We want to insure that all of our members continue to have jobs,” he told the Associated Press.

John B. Russo, a professor in labor studies at the Youngstown State University business school, believes the economy and turmoil in the auto industry will complicate negotiations. “It’s going to be an issue in terms of the negotiations, there’s no question about it. Any union that’s negotiating in the current economic climate is facing that backdrop,” he theorized.