Goodyear, union strike tentative deal on contract

San Francisco, Dec 23: Goodyear Tire and Rubber Co. and the United Steelworkers reached a tentative contract that ends a 10-week-old strike by 15,000 union workers in the United States and Canada, the two sides said.

The agreement calls for the largest U.S. tire maker to give a one-year period of transition for workers instead of an immediate closure of a Tyler, Texas plant. The closure of that plant had been one of the principle obstacles to an agreement.

Goodyear is in the process of exiting unprofitable private label tire production in a bid to boost profits. The Tyler, Texas plant will now be shuttered after Dec. 31, 2007, the company said in a statement.

The new three-year contract also secures retiree health care benefits and increases Goodyear's investments in union facilities, the union said in a statement.

Akron, Ohio-based Goodyear said that the contract will help lower labor costs and boost productivity, in part by redesigning incentive schemes and starting all new hires with market-based wages and benefits.

Negotiating committees for Goodyear and the steelworkers resumed formal talks on Monday, the first time in more than a month.

Goodyear shares briefly touched a 4-1/2 year high on Dec. 15, when the two sides said they would resume formal talks.

The steelworkers had been on strike at 16 Goodyear facilities in the United States and Canada since Oct. 5. While formal talks had stalled in the past month, informal communications continued between the two sides, according to USW President Leo Gerard.

Shares of Goodyear rose 29 cents on Friday, or 1.5 percent, to end at .72, close to a 52-week high for the stock, on the New York Stock Exchange.

Reuters