You might have heard the ``win-win'' cliche describing the Goodyear-United Steelworkers union settlement of a three-month long strike.
Well, there are degrees of winning.
The union won, indeed. If the USW got anything of benefit out of a strike that cost its members thousands of dollars in lost wages and the closing of the factory in Tyler, Texas, then it can claim victory. The union's bargaining position was weak, is weak, and always will be weak as long as tires can be produced in developing nations at lower labor costs.
The Steelworkers succeeded in getting a $1 billion commitment by Goodyear to establish a trust to pay medical and prescription drug benefits for retirees. That's a significant benefit, and also one that is all about retirees-former Goodyear employees-rather than active workers. Looking out for retirees as its roster of active members decreases is a prime goal for the union.
For the current, or future, Goodyear workers in North America, the company's agreement to boost capital expenditures in its plants to $550 million is huge compared to what was planned. However, as large as the amount is, it's spread out among a dozen or so plants-nice, but nothing compared to what is spent on a new tire factory. As a benchmark, Bridgestone/Firestone is spending $220 million on a new plant in Mexico.
The USW got the best it could out of a bad situation. For Goodyear, there's legitimacy to calling it a ``win.''
The strike hurt-production by salaried workers was only at about 50 percent of capacity-but that was short-term pain for a long-term benefit. The tire maker was determined to dump another of its high-cost (compared to other parts of the world) plants, and it succeeded in axing the Tyler facility. A few days later they announced the axiing of a factory in Valleyfield, Quebec, another unioned facility, but not organized under the Steelworkers banner.
In total, the company succeeded in cutting its costs, enough so Wall Street has actually smiled on Goodyear for a change: The firm's share price rose to a four-year high on the news of the labor agreement.
It helps the USW if Goodyear succeeds, and this contract should help ensure that outcome. But three years down the road, don't be surprised if more closings are demanded.