Goodyear's decision to provide the United Steelworkers of America (USWA) with a seat on its board of directors is an extraordinary move considering the discord that has existed between the union and the tire company over the years.
With the Akron-based tire maker struggling financially, the company's negotiators agreed, as part of their recently forged contract with the USWA, to include the union on its board.
In years past, such a decision would have been unthinkable-not just at Goodyear, but in many corporate boardrooms. In fact, this move marks the first time a union member will hold a board seat in the U.S. tire and rubber industry.
But these are different times for American businesses, requiring resourceful thinking.
While some may view this move as a concession, we think it is just the opposite. It shows that Goodyear management, led by CEO Robert Keegan, is willing to make the tough decisions needed to return the company to solid profitability.
Getting the huge tire maker back on track will require everyone-management and workers alike-to pull together. Having a member of Goodyear's largest union on its board symbolizes that the union and the company are now more in step with one another and must face their precarious future together.
And while one vote won't necessarily bring a change in the board's direction, it also doesn't mean the seat is meaningless. If nothing else, the board will have a better understanding of the union's issues and positions, and the union will have a clearer picture of what needs to take place to get the company profitable and growing again.
This alone should improve communication and help avoid potential future conflicts.
The proposed contract, which took five months to negotiate and has been ratified by most union locals, is filled with sacrifice.
Among key points, the union agreed to the closing of a unionized tire plant in Huntsville, Ala., will forgo pay increases for the three years of the contract, will take on higher health care costs and accept lower pension benefits.
Goodyear, for its part, agreed to cut 500 salaried positions at its North American plants; move to a ratio of one manager for every six, and eventually seven, hourly workers; and protect 12 of its 14 plants on the continent from closing for the life of the contract.
Whether these moves are enough remains to be seen. Goodyear wants to slash costs by up to $1.5 billion by 2005, and the new contract, according to one analyst, will provide estimated annual savings of $180 million to $420 million. So the company is on its way to achieving the cost savings it needs.
But just as importantly, Goodyear is indicating a willingness to look at things differently and to change long-held positions. That, too, bodes well for the future.