AKRON—Concessions from both Goodyear and the United Steelworkers of America paved the way for a tentative agreement that was ratified May 8, ending an 18-day walkout by 12,300 workers at nine locations, industry officials said. Compromise also cleared the way for the May 8 settlement which ended a 16-day strike by 2,200 union members at Goodyear's Kelly-Springfield Tire Co. Fayetteville, N.C., tire plant, officials said.
Goodyear compromised some in the areas of wages, cost-of-living adjustment and pension benefits. The union gave a little on new-hire pay rates and medical coverage, according to analysts.
The deal-sealer for Goodyear was the USWA's willingness to ink a six-year labor pact—twice the typical length of a master contract. For the union, it was Goodyear's agreement to align contract expirations at its three Kelly-Springfield units, said Harry Millis of Cleveland-based Fundamental Research Inc.
The pact has no clear victor. Rather, both parties win by avoiding grave losses related to a drawn-out dispute, Mr. Millis said.
Goodyear negotiators completed their primary mission—to eliminate the competitive advantage Bridgestone/Firestone Inc. has had since 1994 when it failed to follow Goodyear's master contract pattern, said Goodyear Chairman Samir G. Gibara.
In three years, Goodyear will have erased any labor-cost advantage BFS realized from breaking ranks in 1994, Mr. Gibara said.
Goodyear's plants already were more productive than its two fiercest foes—Group Michelin and BFS parent Bridgestone Corp.—and this master will widen that gap, Mr. Gibara said.
The contract will help the tire maker cut its medical costs through increases in deductibles and co-payments for mail-order prescription pills. The firm also retained some flexibility to outsource and implement continuous operations, analysts said.
In addition, the company is expected to save millions of dollars through its early-retirement incentive and new progressive hiring rate.
The length of the agreement will help Goodyear solidify its production, investment and pricing plan, and also land long-term supply contracts, according to Mr. Gibara, analysts and union officials.
Overall, the union's compromises in this master will play a pivotal part in Goodyear's global growth and help secure the workers' jobs and standard of living for years to come, Mr. Millis said.
Meanwhile, the Steelworkers won modest wage and moderate benefit improvements. The accord contains a reopener clause in the year 2000 to discuss proposed wage and benefit changes.
USWA President George Becker heralded the contract as a triumph for all Steelworkers.
The workers' wage hike—including a COLA recovery of 29 cents per hour—equaled just about a 3.6-percent increase over three years, Mr. Millis said.
The union's big gains were made on the benefits side, Mr. Millis said. The firm boosted pensions to $41 per month per year of service from $37.
The agreement limits Goodyear's ability to outsource maintenance work and invoke short-term layoffs, said University of Akron professor Dave Meyer.
Another major union triumph involved bringing Goodyear's Kelly-Springfield plants closer to the master fold with a unified expiration date of July 6, 2003—just 75 days after the master lapses.
The work stoppage cost the tire maker about $50 million in lost production, but the company will recover most of that in the next few months through additional work schedules, Mr. Gibara said.
Goodyear is on pace this quarter to post net profits similar to those recorded last year, Mr. Gibara said. The firm reported net earnings in 1996's second quarter of $187.9 million on sales of $3.33 billion.