Current Issue
Published on July 7, 2003

Union, Goodyear need to settle

No surprise there. Such stalemates are normal operating procedure when tire companies and the union sit down every few years to hammer out a new work agreement. So is the huffing and puffing about a strike.

But these negotiations are different, with more than just a new contract at stake.

Goodyear is fighting for its very survival, and it's crucial that an agreement be reached quickly, without a lengthy work stoppage. That would allow the tire maker to focus on getting its financial house in order, building competitive tires and expanding its business.

A strike would hurt both parties, not to mention the thousands of independent tire dealers in North America whose businesses rely on a steady supply of Goodyear-made tires.

Dealers are concerned. Some, like Carl Kazen, president of New England Tire in Attleboro, Mass., hope a strike can be avoided. Mr. Kazen said he and many other Goodyear dealers haven't stockpiled inventory, in case of a strike, to keep their costs down.

Should a strike occur and fill rates decline, Goodyear dealers would be forced to turn to other suppliers-and that would hurt Goodyear in the long run.

As Mr. Kazen put it: ``Once shelf space is occupied by another brand, it's going to a take a while for (those tires) to make it through the dealer channel and be sold off before additional tires are ordered. So the union members will find that they'll end up with shorter work weeks.''

He's right. A lengthy strike would be a disaster for all parties involved and could wind up pushing the Akron-based tire maker into Chapter 11 bankruptcy. That's a situation no one-not even the union-wants to see happen.

Yes, the USWA has legitimate concerns. It wants to keep as many jobs as possible and retain benefits for members as well as retirees.

But for that to occur it needs a strong Goodyear, and right now the company needs all the help it can get to stem the flow of red ink. The union hierarchy as well as the rank and file should keep that in mind.

The clock is ticking. Having recently restructured $3.3 billion of its debt, much of Goodyear's assets are now owned by its banks.

To regain those assets, it needs to show the banks it is making financial progress by returning to profitability and then starting to pay down those loans before they start coming due in 2005.

The best way to do this is to get everyone at Goodyear working toward that goal-the sooner the better.


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