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mtdealer.com exclusive: Union reveals details of Goodyear contract

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Goodyear Tire & Rubber Co. has made a number of major concessions to the United Steelworkers of America as part of the parties' recently ratified three-year labor agreement.

In addition to granting "protected" status to 13 of the company's unionized plants, the contract contains a provision that requires management to meet with the union before implementing lay offs, present to the union all details illustrating a need for a lay off, the potential lay off's scope, and a plan for minimizing the lay off's impact.

"In the event that parties cannot agree on whether there is a need for a lay off or upon the impact and terms of a lay off, the union can challenge the lay off in arbitration on the basis that the company has not done all that it could to avoid or minimize the lay off," according to USWA officials.

In other provisions:

* Goodyear cannot sell any plant, operation "or significant part thereof" to any buyer who has not first negotiated a labor agreement with the union;

* Goodyear has agreed to reduce its salaried staff by 115% of unionized employee reduction based on staffing levels at the end of 2002;

* the average base salaries of Goodyear's executive officers, as a group, may not exceed the average salaries of similarly situated executives at "comparably sized industrial companies," and all future and amended stock purchase, stock option, stock appreciation or other stock programs "will reward only long-term appreciation in the value of the company's stock and will not be manipulated favorably to the executives;"

* Goodyear will give the union a seat on its board of directors;

* Goodyear has agreed to raise $250 million by selling debt securities and raise $75 million by selling Goodyear stock by Dec. 31, 2003, or the union may strike. USWA officials claim they demanded the provision so Goodyear can restructure its debt "before it becomes so strapped for cash that the company cannot be salvaged;"

* if Goodyear doesn't refinance its current bank facilities by launching new loans and securities no later than Dec. 1, 2004, it will pay each active USWA member $1,000 and each retireee $500, while the union also may strike.

Additional provisions have been broken down into the following categories:

Economics.

* Goodyear will adjust cost of living allowances quarterly instead of annually, which it originally wanted;

* a single supplemental unemployment trust fund has been set up to cover plants under the contract;

* Goodyear has replaced its old Performance Recognition Plan, described as "inconsistent" by union officials, with a profit-sharing plan for unionized employees that funnels profits into a pool for distribution;

* Goodyear and the USWA will establish a career development program, effective Jan.1, 2006, that will give union members access to training. The program will be financed at a rate of four cents for each tire sold by Goodyear's North American Tire unit, among other methods;

* Goodyear and the union "will establish a Public Policy Fund whereby they will work jointly on subjects which will advance the interest of our members and help Goodyear become and remain a viable employer," according to USWA officials;

* Goodyear has offered a "greatly enhanced" plant closure package for employees who will lose their jobs when its Huntsville, Ala., factory shuts down. Huntsville employees also "are entitled to priority in the preferential hiring process at (Goodyear's) Gadsden, Ala., plant."

In addition, 100% of Huntsville's production will be transferred to USWA plants and Goodyear will transfer one million tires per year from non-union facilities to Gadsden to help create jobs for displaced Huntsville workers there.

Operations.

* An "Improvement Agreement" between Goodyear and the union "calls for local parties at each plant to establish a Local Improvement Plan. Local parties are empowered to negotiate on any subject which does not change master contract language;"

* in reviewing work records, the "sending" plant must review the records of all laid off employees who desire preferential hire at the time of lay off;

* newly hired employees will meet with the local union leadership during their first week of employment for a paid orientation session;

* Goodyear must notify the local union before installing or using a surveillance device in work areas.

* the USWA will have access to non-union operations in order to communicate with workers there. "Should a varified majority of the workforce sign cards designating the union as their bargaining representative, the company must recognize the union as the bargaining representative of the employee at the location in question."

However, the union has made several concessions of its own, most notably in the areas of medical coverage.

"Due to the lack of operating funds, the cost of retiree medical and drugs, active medical and drugs, the cash costs and a balance sheet expense of pension benefits all have become an immense burden to Goodyear," say USWA officials.

"In order for the employees and new management to bring Goodyear back into profitability, (the) USWA bargaining team has had to make significant changes to our active and retiree benefit plans."

Changes include:

* switching from existing medical benefits plans to a Nationwide Preferred Provider Organization plan, plus the implementation of premium payments for active and inactive employees, retirees and survivors;

* higher co-pays on prescription drugs;

* medical benefits for retirees must stay within national limits.

Raises also have been frozen for union workers, according to USWA officials.

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