27 August 2013 14:08 [Source: ICIS news]
HOUSTON (ICIS)--Goodyear has agreed a four-year “master labor contract” in the US with the United Steelworkers union that allows the company to freeze pension plans, the global tyre manufacturer said on Tuesday.
The deal would take away the volatility pension obligations have on Goodyear’s earnings and cash flow, thus “enhancing our long-term competitiveness and supporting our goal to be profitable through the economic cycle”, the US-based company said.
The contract with the union also “provides flexibility” to reduce staffing, and continues medical benefit cost sharing with workers, Goodyear said.
The master contract covers about 8,000 Goodyear workers at plants in Akron, Ohio; Buffalo, New York; Danville, Virginia; Fayetteville, North Carolina; Gadsden, Alabama and Topeka, Kansas.
"Our goal for these negotiations was to build on the structural cost improvements and progress made in the 2003, 2006 and 2009 contracts, and reduce the potential future impact of legacy pension obligations on our North America business," said CEO Richard Kramer.
"Over the past decade, these four groundbreaking contracts have enabled us to reduce high-cost capacity, establish a [voluntary employees' beneficiary association] to eliminate legacy retiree medical benefit obligations, create a tiered wage structure, improve productivity and now, cap our legacy pension obligations," Kramer added.
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