Goodyear: New labor deal to save more than $1 billion over 3 years

AKRON (Sept. 23)—Goodyear expects its recently ratified labor agreement with the United Steelworkers of America to yield more than $1 billion in cost savings over the pact's three-year life, top Goodyear executives said, laying the foundation for the financial and operating recovery of the firm's North American tire unit. In addition to the quantifiable cost savings, Goodyear is counting on additional returns from productivity gains that will result from increased operational flexibility, Robert J. Keegan, chairman and CEO, told financial analysts during a conference call Sept. 22. Calling the five-month negotiation process "complex and delicate," Keegan said the agreement broke new ground on a variety of issues, including "unprecedented" containment of health care costs, no general wage increases and clearly defined cost-reduction and productivity improvement requirements at every plant.