United Steelworkers union strikes Goodyear plants

CHICAGO, Oct 5 (Reuters) Some 15,000 members of the United Steelworkers union went on strike at 16 Goodyear Tire&Rubber Co. plants in the United States and Canada on Thursday after rejecting the company's latest contract proposal.

Plant closings were one main sticking point in the negotiations. The union on Monday told the company it would terminate its contract Thursday afternoon if, after four months of negotiations, a new deal was not reached.

''The company left us with no option,'' USW Executive Vice President Ron Hoover said in a statement. ''We cannot allow additional plant closures after the sacrifices we made three years ago to help this company survive.'' In 2003, the steelworkers agreed to one plant closing and concessions on wage, pension and health care, Hoover said.

Closing more plants would devastate communities and could threaten Goodyear's long-term viability, he said.

Goodyear said the rejected proposal would have improved its competitive position, while maintaining a ''substantial commitment'' to North American production. Its proposals included key items in an agreement the steelworkers reached in July with Michelin's BFGoodrich unit U.S. plants.

''We simply cannot accept a contract that knowingly creates a competitive disadvantage versus our foreign-owned competition and increases our cost disadvantage versus imports,'' Goodyear chief negotiator Jim Allen said.

Allen said Goodyear remains willing to bargain with the steelworkers and has implemented contingency plans at the plants to try to minimize the impact on its customers.

PLANNING STAGE Goodyear, one of the world's largest tire makers with revenue of .72 billion in 2005, has about 100 plants in 29 countries.

About two-thirds of Goodyear's tire production is for the replacement market and one-third for automakers. All major automakers are customers of Goodyear and automakers said they were talking with Goodyear about contingency plans Thursday.

''There are certain inventory buffers,'' Chrysler Group spokesman Markus Mainka said. ''It was a development that could be expected. It's too early right now to tell if there would be any effect.'' Toyota spokesman Dan Sieger said the automaker expected no immediate impact on its plants from the strike and did not anticipate any production stoppages.

But an extended strike could have a substantial impact on automakers, given relatively low inventories of parts retained at assembly plants, said David Cole, chairman of the Center for Automotive Research.

''It certainly looks like the company is prepared to continue to operate without union workers,'' Fitch Ratings managing director Mark Oline said. ''It remains to be seen how long they can do this and how efficiently.'' Until Monday, the steelworkers and Akron, Ohio-based Goodyear had been working on day-to-day extensions to the current three-year agreement that was to expire July 22.

Goodyear is in a three-year plan of plant closings, asset sales and other cuts to offset escalating raw materials costs and competition from low-cost imports. It also has been shifting North American production to more expensive tires.

Goodyear had proposed protection to all but two of its U.S.

unionized plants, while also seeking concessions on health care, pension and productivity issues. The union had sought plant security and other protections from the latest talks.

The 12 U.S. plants are located in Ohio, Alabama, New York, Nebraska, Kansas, Texas, Virginia, Tennessee, Wisconsin and North Carolina. The four Canada facilities are in Ontario.

Shares of Goodyear were off 6 cents at .23 Thursday afternoon.

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