Goodyear ends the Year Good

The 11-week strike against closing plans of a Goodyear tire factory in Texas, and health care benefits came to an end on Friday after a deal was reached upon in Pittsburgh. The United Steelworkers union with about 12,600 union workers entered into strike at Goodyear Tire & Rubber Co., the third largest tire manufacturer on Oct 5.

Despite of the deal, Goodyear will shut down the Tyler plant at Texas that employs nearly 1100 workers, towards the end of 2007 claiming it to be unprofitable. The one-year transition period would allow the workers to work out their retirements.

“Though we’re not entirely happy with the outcome at Tyler, we were able to ensure that as long as Goodyear stays in the market for the tires built at Tyler, those tires will have to be produced at USW-represented plants in the U.S.,” said Thomas Conway, USW vice president and the head of the union’s Goodyear negotiations.

According to the USW President, Leo W. Gerard, the previous three-year labor agreement that ended on July 22 validated the unity among the workers and their families. He also said that they would not allow the company to walk away from obligations earned through a lifetime of hard work and loyalty of the workers.

As per the deal, the company would trust more than $1 billion for drugs and medical facilities for its current and future employees, who would retire.

The capital investments at the 12 plants that include The Town of Tonawanda, Akron, Marysville and St. Marys in Ohio; Danville, Va.; Fayetteville, N.C.; Gadsden, Ala.; Lincoln, Neb.; Sun Prairie, Wis.; Topeka, Kan.; Tyler, Texas; and Union City, Tenn, would be tripled by Goodyear to at least $550 millions as per the contract.

“Our goal was always to reach a fair agreement that improves our ability to compete and win with customers. This agreement would accomplish that goal,” said Chief Executive Robert J. Keegan.

After the deal, Goodyear said that it would decide new wages and benefits for its new hires as per the market standards.

With around 80,000 employees, Goodyear is based in 29 countries. It claims that the non-union and temporary workers followed the same procedures and quality standards as the regular employees, in making tires during the strike period.

Gary Schaefer, vice president of the Steelworkers Local 286 in Lincoln, Neb., said he hadn’t read the entire agreement and was unsure how members would respond to it.

Mark Pratt, a Goodyear maintenance worker and treasurer of Steelworkers Local 904 in Sun Prairie, Wis., said that something was better than nothing, and it would be a good Christmas gift for everyone.

With the announcement of the deal, the share price of Goodyear that ranged between $9.75 and $19 rose to $19.72 on the New York Stock Exchange.