VALLEYFIELD, Quebec—Goodyear has canceled a planned $57 million expansion at its Valleyfield tire plant due to increased productivity at its existing tire plants and the increased ability to source more products globally. The move angered the union staffing the facility, which is one of Goodyear's most efficient plants.
In killing the project, Goodyear cited its ability to source more tires from Latin America and increased production from seven-day, continuous operations at other factories.
``While this is unfortunate for the people of Valleyfield, this definitely is positive for the company overall, as it is able to satisfy customer requirements without the need for additional investment,'' said G. Wayne Barnes, president of Goodyear Canada.
``At such time (when) there is a need for additional capacity, a Valleyfield expansion plan will be considered,'' he added.
The company's abrupt reversal caused the plant's staff—members of Local 143 of the Syndicat des Communications, de L'Energie et du Papier (SCEP)—to call for the dismissal or transfer of Valleyfield's human resources manager, plant manager and production manager, said Gaetan Daoust, national representative for the SCEP.
``We're angry and frustrated and the top local management doesn't have any credibility with us,'' he said. ``We've done a lot since 1990 to satisfy the company, and this is how they repay us.''
Employees also have refused to work a third Sunday shift because it was added as part of an agreement between Goodyear and the union that was supposed to ensure Valleyfield would get the investment, Mr. Daoust said.
Members of Local 143 have worked the Sunday-morning shift since March, when a memorandum of agreement was signed between the union and the company contingent on the promised investment, he said.
The SCEP plans to sue Goodyear for breaking promises made in the memorandum, Mr. Daoust said. Last January, Goodyear noted the expansion would create 400 jobs.
The tire maker's markets in Latin America have softened, making capacity there available for export to the U.S., a Goodyear spokeswoman said.
The company has watched its Latin American sales erode throughout 1998 and the first half of 1999, according to its financial documents. Tire sales in the region dropped 11.9 percent in 1998 to $1.25 billion from $1.41 billion in 1997.
Through the first half of 1999, Goodyear's sales in the region have sunk 30.6 percent compared with 1998's first half to $459.8 million from $662.5 million, while operating profit has plummeted 59.5 percent to $46.1 million from $113.9 million.
Local 143 agreed to the third Sunday shift and other changes at Valleyfield after watching Goodyear's response to United Steelworkers of America Local 745's rejection of proposed schedule and work-rule changes at the tire maker's Freeport, Ill., plant, Mr. Daoust said.
Goodyear had offered a $40 million investment at Freeport if the union agreed to the tire maker's proposals, but re-allocated the money, slashed 850 jobs and transferred production out of the factory when the union voted the proposals down.
``We were told last January that for the Valleyfield plant to get the expansion, we'd have to agree to the seven-day schedule,'' Mr. Daoust said.
The plant previously operated on 20 shifts per week, sitting idle only on Sunday mornings, he said. Since March, workers staffed the third shift, but now will demand overtime pay to work it, he said.
Goodyear will not require Valleyfield employees to work the third Sunday shift because it was contingent on the investment, the Goodyear spokeswoman said.
When announcing the Valleyfield investment, Goodyear praised the plant's workers for improving efficiency.
``In our global rationalization efforts, we invest in our most efficient facilities,'' John Orr, vice president of manufacturing for Goodyear's North American tire division, said at the time. ``Competition for capital investment is also global, and the Valleyfield plant has made significant improvements to increase the efficiency of plant operations.''