US Goodyear expects to save $215m from new labour deal

29 September 2009 20:32  [Source: ICIS news]

HOUSTON (ICIS news)--Goodyear Tire & Rubber expects to save $215m (€146m) from its new four-year labour contract ratified by the United Steelworkers (USW) union, the US tyre producer said on Tuesday.

Goodyear, one of the world’s largest tyre firms, also produces styrene-butadiene rubber (SBR), which is used to make tyres. It is a large buyer of butadiene (BD).

The $215m in cost savings will be reached through added flexibility in the contract, including a reduction in the required minimum staffing levels at the plants; additional allowed buyouts in response to unexpected market downturns; and the outsourcing of certain equipment maintenance positions, Goodyear said.

Including pre-bargain agreements to reduce staffing levels at five plants, the company said it expects to realise $555m in total savings over the four-year term.

For its part, Goodyear agreed to invest $600m in union-represented US plants in Akron, Ohio; Buffalo, New York; Danville, Virginia; Fayetteville, North Carolina; Gadsden, Alabama; Topeka, Kansas; and Union City, Tennessee.

The Union City plant was the only one not given job security measures through the new contract.

The 2009 deal built on the changes made in the 2003 and 2006 contracts and addressed the core issues impacting the competitiveness of Goodyear’s North American tyre business, said Richard Kramer, president of Goodyear’s North American tyre business.

As of 13:52 hours Houston time (18:52 GMT) on Tuesday, Goodyear traded at $17.11/share on the New York Stock Exchange, up 58 cents, or 3.5%, on the day.

($1 = €0.68)

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By: Ben DuBose
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