GADSDEN, Ala. — The remaining 400-plus members of United Steelworkers Local 12 have approved Goodyear's plan to close its Gadsden passenger tire plant.
Goodyear said the plant will permanently close May 6.
“Goodyear can confirm that our tentative agreement with the United Steelworkers to close our Gadsden, Alabama, tire plant has been approved by the membership of the local union," Goodyear said. "This move will position Goodyear to more cost effectively produce the premium tires consumers demand and improve the competitiveness of our manufacturing footprint."
According to Mickey Ray Williams Jr., president of Local 12, the members voted 375-107 to amend the collective bargaining agreement to allow Goodyear to close the 90-year-old plant.
The union vote was required as the 5-year union contract reached in 2017 mandated that the plant remain open through 2022; the vote amended the contract to reflect the early closure.
The tire maker confirmed the closure late last month and said it is part of a strategy to strengthen its industry competitiveness by focusing on more profitable segments. Goodyear offered lump sum payments to employees based on tenure, Mr. Williams said.
Goodyear closed the plant in March due to the coronavirus pandemic.
The tire maker has not disclosed a timeline for the official closure, though Mr. Williams said he expected Goodyear to do it "as soon as possible."
"We know what hard times it is with the pandemic right now," Mr. Williams said April 29. "The consumer tire market is saturated — I don't think anyone is producing anything right now. But Goodyear seized the moment. They took advantage of the pandemic and used it to keep us from going back.
"So Goodyear has left us. We didn't leave them. They left us."
Goodyear disclosed its plans to close the plant in an April 23 8K filing with the Securities and Exchange Commission. The filing stated that Goodyear expects the Gadsden closure to yield $130 million in annual savings in 2021.
In February, Goodyear laid off 105 employees at the plant and cut the daily production "ticket" to between 2,000 and 5,000 tires, down from 17,000 units per day a year ago and from more than 25,000 units per day only several years ago.
The February cuts came after 740 hourly workers at the plant accepted buyouts in December 2019 as part of a realignment by Goodyear of its North American production capacity. Those actions trimmed the work force to just 411 hourly employees (393 protected), down from more than 1,600 a few years ago.
The Gadsden plant, which produced the Assurance passenger tire for cars and light trucks, is one of five unionized factories that Goodyear operates in the U.S., along with Akron; Topeka, Kan.; Danville, Va.; and Fayetteville, N.C.
Mr. Williams said workers will have the opportunity to take jobs at those plants, whether they do it "by preference" or "by priority," the latter of which means a worker gets their choice.
"This is just really hard to put into words," Mr. Williams said. "Goodyear has been around Gadsden since 1929. My father, he retired from there. I hate to see anything go down this road. In 1999, we went down this road to an extent, but we were saved by the Firestone rollover. Some stuff was brought to light in Akron. They gave us another shot and we got another 20 years out of the plant.
"But it's still not enough. There's no proposal, no buyouts, nothing else that is worth the jobs we had inside that plant."
Goodyear estimates it will incur pre-tax charges of about $280 million to $295 million, according to a previous report in Tire Business. Of that, approximately $170 million to $180 million is expected to be cash charges, primarily for severance and other associate-related costs of about $55 million and $40 million, respectively.
Other closure costs should fall between $75 million and $85 million, Goodyear said in the filing.