It´s been about seven months since the 86-day strike by more than 12,000 United Steelworkers members at 16 North American Goodyear sites ended.
For some of the players involved in the strike, time has eliminated the bitterness that labor disputes often generate; they say the scenarios at the plants are back to normal. For other people, the wounds remain fresh, and they wonder whether the traditionally positive relationship between the USW and Goodyear will ever be the same.
The current three-year contract, ratified Dec. 28, includes closure protection over the span of the agreement for all covered U.S. tire and rubber plants except one: the tire facility in Tyler, Texas, which is scheduled to close by the end of this year.
The pact also includes the establishment of a Voluntary Employees´ Beneficiary Association trust fund, to which the company will contribute $1 billion to help pay for retiree health care costs, thus leaving that obligation behind for good.
These issues, as well as plant investment and cost-cutting language in the contract, weren´t agreed upon easily during 2006 negotiations, evidenced by the eventual walkout on Oct. 5.
The local level
The transition back has gone fairly smoothly for the company, as indicated by the production levels realized over the past several months. Goodyear was back to pre-strike production levels at the affected plants by about six weeks after the walkout´s end-sooner than anticipated-and has continued to operate at full production and pre-strike staffing levels, a company spokesman said.
The fast recovery for the North American Tire business reduced the strike´s impact-initially estimated to be more than $360 million-to about $120 million, he said. Fill rates generally are back to pre-strike levels as well.
Harry Alford, president of USW Local 878 in Union City, Tenn., said it didn´t take long for his membership following the strike´s end to get "back to business as usual."
"We came back and after a week or so, we were back in the groove," he said.
Generally, there are no lingering ill feelings from the strike in Union City, Alford said. "(The company has) been professional, and so are we. We had differences of opinion, we struck over them and we settled. We picked up and moved on."
It´s a little different at the Topeka, Kan., tire plant, where Local 307 and the company have been working on a local supplement agreement since the strike ended, local President Robert Tripp said. He didn´t detail the issues being negotiated but said there is new management at the plant and developing that relationship while bargaining on the local agreement has made things "more complicated."
"I wouldn´t say relations right now are great, but they´d be better if we can get these issues taken care of," Tripp said.
The Goodyear spokesman said attitudes and feelings are individual, and the company wouldn´t presume to speak for everyone. But a sooner-than-expected return to pre-strike production could be interpreted as a positive relative to the attitudes of the workers, he said.
At Goodyear´s Gadsden, Ala., tire facility, workers are glad the strike is over, but they believe the walkout was necessary, said Bren Riley, vice president of USW Local 12. The membership also is excited because a planned modernization project at the site will help secure jobs for the long term, he said.
Little detail has been revealed about the project, but Goodyear was included on a list of companies with capacity in Alabama slated to receive money from a $300 million-plus bond issue. The state has earmarked $20 million for Gadsden, and Riley said the union is expecting a minimum $125 million investment there.
He gave the company credit for approaching the state of Alabama and asking what incentives might be available. "This state has incentives for new industry but not a lot for established ones," Riley said, adding that Goodyear has been operating in Gadsden since 1929. "The company has an $80 million payroll here, and the people spend a lot of money in the area. That had a lot to do with getting the state committed to help."
The Goodyear spokesman confirmed that the state of Alabama has allocated funding for the company to support capital investments in Gadsden should it proceed with a project there, and he added that a similar effort is under way in North Carolina for investment at the Fayetteville tire facility.
He said the company appreciated the efforts of state and local officials in those locations to secure the incentives to support any future investment.
Another post-strike issue in Gadsden has been the integration of replacement workers from the strike into the unionized work force. By Nov. 1 of last year-after the strike had been going for about four weeks-between 300 and 400 replacements had been hired; by the end of the dispute, about 800 were in the plant.
Goodyear hired some of the replacements permanently following the strike, though Riley said the union doesn´t know how many. He did say that everyone given USW membership opportunity has taken it, and the local´s leaders have struggled with the resulting issue.
"What do we do? We want to take these people in and teach them, hope they learn the system and the way union workers operate," Riley said.
"But if we exclude them, three years from now they could be back in, but this time with the experience and ability to teach others.
"We know the union isn´t in the hall, it´s on the floor."
Seeds of a dispute
While many have put the strike behind them, others find it to be more difficult. Ron Bloom, assistant to the president with the USW, said the entire situation was disappointing and the damaged relationship with Goodyear was a "huge issue for us."
"Welcome to globalization, welcome to the world of hedge funds and boards of directors," he said. "The easy thing to do is to cut labor costs and eliminate jobs. The harder thing to do is to work with the workers, to reinvest in technology to build a great product."
Bloom said the company has done some good marketing and released some outstanding products-like the Assurance tire, for example-in recent years, and the union has helped make them high-quality and successful. But he believes the difficulty at the bargaining table with the company last year actually began in 2003, when the company was having significant financial troubles.
He pointed to several areas where he believes Goodyear made mistakes-including overleveraging, underinvesting and lost opportunities with the Firestone recall of 2000-leading up to 2003 master contract negotiations.
"The company was wise enough to come and see us a fair distance from the bargaining deadline and say, ´Look, we are in a lot of trouble and need to try to do a lot of things differently, and we need your help and support,´ " Bloom said.
The two sides worked out a contract agreement in September 2003 where the union felt it conceded on many issues, including the closing of the Goodyear Dunlop tire plant in Huntsville, Ala. "The company was on death´s door, and if we had struck them in ´03, they would have been in bankruptcy in a very short period following the beginning of the strike," Bloom said.
"We made what we thought was a very innovative agreement, and part of it is we say to them that we expect them to fix the balance sheet and we get some binding commitment to it, along with some good faith understanding."
But Bloom said Goodyear came to the table in 2006 talking about "how imports are killing us, we remain hugely levered, we have a very weak market, we have brutal material costs." The USW had reached an agreement in August 2006 with Michelin´s BFGoodrich tire manufacturing unit for workers at its three U.S. plants, but the Goodyear proposal included some extra items, most notably the VEBA and the closure at Tyler, he said.
The early VEBA contribution offer of $560 million was lower than what the union was willing to accept, and the USW believed the Tyler closing was too much, especially on top of the Huntsville closing in 2003.
"Goodyear closed Huntsville, BFS closed (its) Oklahoma City (tire plant) and Goodrich closed (its) Kitchener (Ontario tire facility)," he said. "We felt the cycle was done, and it should stop. But (Goodyear) said that it was abandoning the private label market here and said it had to close Tyler."
With this proposal on the table, the USW believed it had no other choice but to "hit the bricks," Bloom said.
"I don´t deny Goodyear has a tough hand to play," he said. "I don´t deny the fundamental reality of the global tire industry is you have three big players, two of whom have protected home markets. In America it´s ´Everyone come and take and eat our lunch.´ I can´t deny when I look at Goodyear that their North American footprint is bigger than anyone else´s in relative terms to their revenue base and they have the toughest hand to play.
"The question, though, is how you deal with it. They were in a tight spot and asked us to make sacrifices again."
Tough days ahead?
Three months later, the two sides had their agreement, but not without "disappointment and anger and a sense of betrayal," said USW President Leo Gerard. The Tyler plant will close, but the $1 billion VEBA contribution-plus future cost-of-living allowance diversions-will produce the "steady stream" the USW needs to help its retirees, he said.
The union also felt it overcame a "big hurdle" with the $550 million commitment to capital investment at Steelworker-represented plants, Gerard said.
With negotiations for the 2009 bargaining season less than two years away, Bloom doesn´t expect the road to be easy.
"We have a truce right now," he said. "Maybe they´ll surprise us; maybe they´ll persuade us that they mean to make things right. If you want the loyalty and support of your work force, you have to persuade them you mean to try.
"Today, I don´t see a lot of evidence for it. At this level I´m not an optimist; I think we´ll have a tough go with Goodyear in the period ahead."
But thus far in 2007 in North America, the results have been very good, the company spokesman said. For example, in the second quarter, the North American Tire unit improved its revenue per tire by 6 percent and its segment operating revenue for the period ballooned to $53 million from $6 million, he said. North American sales were down 3 percent in the quarter to $2.28 billion, primarily because of the company´s exit from a portion of its private label tire business.
Goodyear believes it learned a great deal during the strike about working with reduced inventories, meeting customer service goals and taking costs out of the system, the spokesman said. "We believe all of these will benefit us as we work to develop a supply chain that is competitively advantaged."
As for concerns about lingering hard feelings between the USW and the company, the spokesman hinted that all parties have to keep their eye on the ball.
"Generally people at Goodyear are focused on the business, and doing what is necessary to grow the business profitably."