Goodyear: Ratification assured

Goodyear has now officially announced the ratification of the labour contract with the members of the Steelworkers, who have announced that they will be using this contract as a pattern for their negotiations with Goodyear’s competitors. However, this plan is more or less unpromising.

Initially the unions are going to start negotiations with Bridgestone/Firestone and then with Michelin; its Uniroyal/Goodrich factories have agreements which have reached expiration date now. Even though the contracts with Continental were made through to 2005, a “re-opener clause” makes new negotiations necessary. The unions want improvements and Continental North American Tire is in a desperate need to achieve better results through the unions they currently have, because a restructuring with many layoffs otherwise seems to be unavoidable. Until today the unions delayed Continental discussions with the argument that they have been too busy with the Goodyear negotiations. Cooper and Yokohama follow at the end of the unions list.

On the fringes of the IAA in Frankfurt this magazine has been able to discuss “off the record” with managers from Goodyear’s competitors and it appears to be totally clear that competitors will not concede as Goodyear did. One high ranking manager called it a “question of instinct of self preservation to reject most of the requirements.”

The steelworkers have not only prevailed with employee requirements but now also control and lead the Goodyear management. At least, that is the way competitors see it. Officially, Continental had nothing to say but observers close to the management stressed that it would totally impossible to enforce requirements similar to those given by Goodyear. CEO Wennemer would never give up responsibility over where to invest and in which measures. He would reject the slightest efforts made by unions to decide where new products have to be built first, or whether the agreement allowed import or export without the unions’ accordance. Anyway, it is impossible for Continental to give the union job guarantees under the given circumstances. Continental is not under pressure and not relying of the goodwill of the unions. The re-opener clause could in the end become an “exit clause.” Wennemer set a time frame late last year when the turnaround must have taken place and the writing is on the wall regarding the outcome if Continental is still losing money then. Continental can afford to leave the US-market. Not only that. In doing so, it would make it stronger.