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Key Issues
Like many American manufacturing companies whose products must compete in a global market, cost is a significant challenge for Goodyear. Goodyear’s goal in negotiations is to achieve a contract that improves its competitive position by addressing issues related to productivity and flexibility improvements in its factories, as well as pension and health care benefits costs.
Productivity
Goodyear’s goal for its North American Tire manufacturing operations is to be competitive within North America and with the rest of the world. The Company has committed to investing in its plants for more modern equipment to produce its innovative products more efficiently. A workforce that’s committed to the same goal is critical to the Company’s long term success.
Flexibility
Goodyear manufactures tires in North America for its North American customers. In a rapidly changing economic environment, Goodyear’s facilities must have workers in the right place, at the right time, producing the right products at the right cost.
Pensions
Many of Goodyear’s U.S. and non-U.S. employees participate in defined benefit pension plans, although effective December 31, 2008, Goodyear froze its U.S. salaried pension plans. The hourly defined benefit plans were not frozen. Goodyear has experienced periods of declines in interest rates and pension asset values. As a result, Goodyear’s pension plans are significantly underfunded.
Benefits
Goodyear offers a comprehensive benefit package for its U.S. hourly and salaried employees. Bargaining unit employees are eligible for medical benefits and participation in the 401(k) plan after 90 days of employment. Goodyear, like many U.S. employers, continues to face double-digit inflation for its medical benefits costs annually.