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Discussion Starter #1
Closing one of the two plants they want to close right away. It looks like they are going to bust the union. Since the union won't budge they have started hiring all new workers and say they will get production up and running ASAP. Maybe the Dunlop tires will start getting made again? In case you want to know where I saw this it was in the Wall Street Journal today.
 

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Here is the article:

DETROIT (MarketWatch) -- Goodyear Tire & Rubber Co. (GT) said Monday that it
would close a unionized plant in Tyler, Texas, in the midst of a three-week-old
strike by the United Steelworkers union, a move that underscores the deep divisions
between the sides.

The United Steelworkers, in a statement, called the move "counterproductive" and "a
further example of the management's foolish notion that believes it can shrink a
company to prosperity."

The Tyler plant is one of two factories Goodyear reportedly wanted the right to
close in negotiations with the union. The issue of plant closings and job security is
one of the factors that led to the Oct. 5 strike by the USW.

The union has said it won't accept plant closings. The strike halted work at 16
Goodyear plants in the U.S. and Canada that employ about 15,000.

The closing will eliminate about 1,100 jobs and create annual savings of about $50
million after tax, Goodyear said. It also will result in a restructuring charge of
between $155 million and $165 million.

Goodyear spokesman Ed Markey said the closure is due to the company's exit earlier
this year of certain segments of the private label tire business.

Though the plant is unionized, Markey said the contract with the USW expired. There
are no formal talks scheduled, but Markey said Goodyear continues to have a
"dialogue" with the union.

But a protracted battle is possible. On Oct. 13, the company announced it had
borrowed $975 million - "additional cash in the unlikely event of a prolonged
strike," Chief Financial Officer Richard Kramer said in a statement.

Analysts and investors have said Goodyear needs to get a new contract that allows it
reduce capacity. However, a prolonged strike could lead to steep losses just as the
tire maker's finances are starting to bounce back.

The union said Monday that Goodyear is ignoring the concessions the USW made in
2003, which included a plant closing.

"Now they seem committed to stripping away health care benefits from those who made
the turnaround possible and to further close plants and abandon the business," USW
Vice President Tom Conway said in a statement.

Goodyear - facing high raw material costs, foreign competition and lower production
from some auto makers - has said it needs a more competitive labor agreement.

JP Morgan analyst Himanshu Patel, in a Monday research note, said the union likely
won't have any recourse to fight the Tyler closure other than prolonging the strike.

"With what we estimate is two months of inventory, and additional liquidity provided
by the just-drawn down revolver, we continue to believe (Goodyear) has more staying
power during this strike than the union," he wrote.

Some analysts have said Goodyear needs to close two North American plants and
Monday's announcement "suggests that the odds of achieving two plant closings instead
of just one has risen," Patel wrote.

But the closure will get Goodyear close to its 2008 capacity reduction goal, which
means it's "possible Goodyear will not shut down another U.S. plant in the near-term
and instead may look for savings in the form of lower wages, fewer job
classifications and reduced legacy costs," wrote Merrill Lynch analyst John Murphy.

Goodyear has used production at nonunion plants, existing inventory and tires made
at its overseas plants to supply its customers. Slow replacement tire sales this year
led to high inventories.

The union's statement Monday also questioned the quality of Goodyear tires made by
temporary workers.

"The company's decision to bring in unskilled and untrained temporary workers from
the street is another weak attempt to convince our customers and investors that
everything is all right," Conway said in a statement.

Markey said Goodyear has "well-established" quality control systems.

"We have well-established, long-standing systems in place to ensure that each
Goodyear tire meets our standards, especially as it relates to quality," he said.
"Those systems, as well as the salaried quality control and technical personnel who
oversee them, continue to operate as they did before."
 

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BlueWing said:
Closing one of the two plants they want to close right away. It looks like they are going to bust the union. Since the union won't budge they have started hiring all new workers and say they will get production up and running ASAP. Maybe the Dunlop tires will start getting made again?
Wouldn't count on it. The strike will continue and not sure I would want a tire out of the first few runs by management or a newbie scab and I'm not a union guy. Here's the local article. http://www.zwire.com/site/news.cfm?news ... 6369&rfi=6
I've been telling these guys for months that they were indeed going to shut the plant. They were in denial and sure things would work out. Local and state incentives were in the millions. Goodyear rejected them and said they would need to retool. Private donors kicked in millions more to facilitate the change over, Goodyear rejected. I suspect they already have foreign plants ready to come on-line, probably in China. None of this should be a shock since Goodyear has already reneged on a 2003 deal to keep the plant going where they got huge incentives and tax breaks.

To be fair, the local union employees have been making concessions and taking pay cuts for years. Kinda like other things though. You can't compete in a world market paying a production worker 40-$50k/ year when the foreign competition is paying 1/10 or less.
 

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Discussion Starter #5
Goodyear is in the tire business to make money. When they stop making money they will no longer be in business. Looks like they have few choices. Either they cut costs, sell more tires or raise their prices? Since the tire market is over saturated already that only leaves a couple choices and raising prices a lot will then mean less market share.
 

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I wonder what kind of cuts have been made in mangement? Do they reward themselves with bonus while cuuting benefits to their workers? Are Goodyears problems due to mismanagement or is this an excuse to cut American jobs and open a plant over seas for larger profits?
 

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Not familiar with unions, but I wonder if some of the plant closings and moving operations overseas were just to eliminate that headache from management. I've got a four year college degree and work in the healthcare industry and only make 65,000 annually. Seems like the unions have priced themselves out of a job.
 

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papa benny said:
Not familiar with unions, but I wonder if some of the plant closings and moving operations overseas were just to eliminate that headache from management. I've got a four year college degree and work in the healthcare industry and only make 65,000 annually. Seems like the unions have priced themselves out of a job.
I must be old. To me, earning $65,000 a year with only a four year degree is pretty darned good especially in terms of dollars in Mississippi. I'm not knocking Mississippi at all, here. I'm only mentioning it because of the relatively low cost of living there (which I also enjoy here).
 

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It appears unions have ceased to serve their usefulness.. where are those employees going to get a job making $65k a year now ? maybe they can move to Tiawan.. ? I think I would have taken what Goodyear was offering and tell the union to go jump ...

cosmic
 

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We are to blame for this. Each one of us has shopped and shopped until we found the lowest price. Companies cut and cut costs until they can compete with the market WE HAVE CREATED. One of the biggest costs is labor and they can find a lot cheaper labor elsewhere. The thing that drives companies to make better profits is also our fault. We are also owners of these publicly traded companies and as stock holders if the bottom line does not look good, we sell the stock causing a devaluation of said stock. It is a vicious cycle that we have created. Next time you are riding and notice another "brick and mortar" specialty store closing think about the how difficult it is to compete with someone who has no overhead just a computer and an 800 number of his supplier...
 

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I thought you were talking about the town of Goodyear AZ.


:arrow: :lol: :?
 

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I just I thought I'd look up and see how much the CEO of Goodyear was making.

Robert J. Keegan
Chief Executive Officer
Goodyear Tire & Rubber Company (The)

In 2005, Robert J. Keegan raked in $7,707,631 in total compensation including stock option grants* from Goodyear Tire & Rubber Company (The).

From previous years' stock option grants, the Goodyear Tire & Rubber Company (The) executive cashed out $1,641,726 in stock option exercises.

And Robert J. Keegan has another $2,715,492 in unexercised stock options from previous years.

I wonder how many Vice Presidents Goodyear has and how many are making over the 1 milion mark.
When they talk about the Salary they are talking about the salary and benifits also. And when they talk about "Trimming Legacy Cost" that's your Dad's retirement.

You can look at all the companies and whole industries that have gone tits up with not only the workers losing but the retirement being stolen from those that put their whole life into making the company money.

You'll also find the executives living in houses that are the size of a Holiday Inn... Opps... I know the house is in their wifes name.
 

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True enough, Tom. Now, how about those unions? Where DO you think Jimmy Hoffa is buried? Therein lies the problem: The unions are Big Business, too. They're just "shareholder owned." Remember, it's not about making a profit - it's about LOOKING LIKE you're making a profit!
 

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Thanks to the goverment a very high percentage of middle class jobs have gone over seas...Unions have no control over this issue..The people that have control are us and we let it happen...So for anyone to use or state the union have out lived there usefulness must be a very rich person or on welfair.......
So lets face it why not start understanding goodyear want to be like the rest screw the american worker for there bottom line....They know we the people will still buy there products not matter what.
 

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Baby Redwing said:
Thanks to the goverment a very high percentage of middle class jobs have gone over seas...Unions have no control over this issue..The people that have control are us and we let it happen...So for anyone to use or state the union have out lived there usefulness must be a very rich person or on welfair.......
So lets face it why not start understanding goodyear want to be like the rest screw the american worker for there bottom line....They know we the people will still buy there products not matter what.
I am not very rich.. nor do I live on welfare... I own and work in a cabinet shop... and make nowhere close to the hourly wage that union workers
make in that Goodyear plant.. IMHO unions are the reason this plant is closing... and in many other instances also... I still think unions have outlived their usefullness..... ! is the union going to pay the bills of those workers that were laid off at Goodyear ? but i would be willing to bet
the union bosses will continue their same life style ... so tell me.. who
is better off by the presence of a union at that plant ????? and where will those laid off workers go find a job paying $65.00/hr... oh.. wait .. I bet the union will hire them huh ??

cosmic
 

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cosmic_chariot said:
It appears unions have ceased to serve their usefulness.. where are those employees going to get a job making $65k a year now ? maybe they can move to Tiawan.. ? I think I would have taken what Goodyear was offering and tell the union to go jump ...

cosmic
AMEN
 

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As a non union person / business owner I will tell you the union is not closing the plant the company is ....WHY !!! Cheap foreign labor (about $4.00 per hour) .... Not even the min. wage of this country.......Guess what!!!!! It"s the fed's that allow this to happen with all there treaties of free trade ect. and yes it was all of us (even you) who voted for these people..
You sound like a person who is upset that you are not able to get paid what others get.... That AMERICA...We all have to live with it...
If it was your cabinet shop closing and moving all work over seas you would be crying the guy at Burger King will be making more money than me..... Guess that would be the unions fault also....

Last I will say about the issue....

RED

I bid againest union labor every day ..
 

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Looks like we need to boycott Goodyear and Bridgestone/Firestone. Stone is doing the same thing. The Oklahoma City plant is closing and they are trying to cheat the workers out of severance pay.
 

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Rinkopr said:
We are to blame for this. Each one of us has shopped and shopped until we found the lowest price. Companies cut and cut costs until they can compete with the market WE HAVE CREATED. One of the biggest costs is labor and they can find a lot cheaper labor elsewhere. The thing that drives companies to make better profits is also our fault. We are also owners of these publicly traded companies and as stock holders if the bottom line does not look good, we sell the stock causing a devaluation of said stock. It is a vicious cycle that we have created. Next time you are riding and notice another "brick and mortar" specialty store closing think about the how difficult it is to compete with someone who has no overhead just a computer and an 800 number of his supplier...
Should we shop around and pay the highest price? This would not make a difference. The big businesses would then be showing huge profits and still looking for ways to cut labor costs by sending the jobs over seas where they would be using children as poorly compensated slave labor.
 

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Cutting labor costs is good business! Executives are taught to trim costs as much as possible and to meet the bottom line. We as customers look in Sundays paper for the best deal on tires and other things. We all help companies to lower their prices in some way. We do it to make our own pay checks stretch more. If prices drop... then someone has to give, weather its the employees or moving or closing a factory. Yes companies move factories to China for lower wages, but you have to look back 20,30 years ago when the companies more out of the northeast to the southern states for lower labor costs and cheaper locations. Now those locations are not cheap any more. This cycle has been going on for hundreds of years (1800 hundreds cheap labor... slavery). Its more than just labor costs and locations, other things add to it also.

I don't like it anymore than you, but it was forecast 20 years ago that the US was heading to be a service only country. The industrial age for us is past. I didn't believe it 20 years ago, I do now.

Dennis
 
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