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Mon, Oct 09, 2006 - Page 10 News List

Goodyear may be facing long strike


Legend has it you used to be able to smell the rubber in the working-class US city of Akron, Ohio, home to the world's third-largest tiremaker.

But these days the most noticeable scent near Goodyear Tire & Rubber Co's hulking headquarters is the smoky smell of wood burning in metal barrels that keep striking workers warm from the unusually chilly fall air.

As far as the pickets are concerned, they might be out there a long time.

As of Saturday, two days after union members walked off the job, no new talks had been scheduled between the company and the United Steelworkers union.

Analysts say the strike could cost Goodyear, which is on fragile financial ground after five years of losses, US$2 million a day. Consumers should not see tire prices rise unless the strike is lengthy, according to analysts, who also say the company could save US$50 million a year by closing a US plant.

The union says shuttering plants is not negotiable. Steelworkers say factories in Alabama and Texas are on a company closing list.

``We're in the beginning stages. We're in this for the long haul,'' said Eric Pirogowicz, 50.

Pirogowicz has worked for Goodyear for 33 years, most recently making race car tires in Akron with 430 others. He is among more than 12,000 union members from 16 plants in the US and Canada who walked off the job on Thursday.

``A strike isn't a good thing,'' said Darryl Jackson, president of USW Local 959 in Fayetteville, North Carolina. ``But if we're forced into a fight, we're going to fight to keep what we have.''

The United Steelworkers union and Goodyear have tried unsuccessfully since July to reach a labor deal.

Goodyear, which says it is maintaining production at nonunion plants and by depending on salaried employees and imports, says the union refused to agree to help the company remain competitive in a global economy. It says its latest offer protected jobs and provided for retiree medical benefits.

Since workers agreed to closing a plant and cutting pay and other benefits in 2003, union members are not happy with the current proposal, which it says includes pay and other cuts, particularly after top executives got big bonuses this year.

Securities and Exchange Commission records show Goodyear CEO Robert Keegan collected a US$2.6 million bonus last year, while the head of the company's North American tire division, Jonathan Rich, got US$680,000. and CFO Richard Kramer got more than US$587,000.

In 2003, Goodyear flirted with bankruptcy, losing more than US$1 billion, taking on billions in debt and seeing its shares dive from US$20 in 2002 to below US$4 on the New York Stock Exchange.

It returned to profitability for the first time since 2000 this year and its stock has rebounded. Shares closed at US$14.46 on Friday.

But Keegan has steadily warned that the turnaround was not complete and looming labor, material and retiree costs and other issues threatened future profits.

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