While Goodyear's decision to locate a $550 million tire plant in Mexico might be considered a blow to the United Steelworkers (USW), the labor union that represents about 9,000 Goodyear workers in the U.S. is claiming a partial victory.

The USW claims it negotiated a commitment from Goodyear to invest a like amount in its unionized U.S. plants for “high-value-added” (HVA) tire production above and beyond the $700 million the tire maker already had budgeted for 2015.

In a statement issued April 24—in response to Goodyear's announcing that same day it would build its new plant in San Luis Potosi, Mexico—USW International Vice President Tom Conway said the union was able to “secure significant and specific capital improvement and expansion commitments from the company to ensure that existing USW plants continue to be a vital and expanding part of the company's manufacturing footprint.”

When asked specifically about that comment, the USW elaborated, saying: “The new commitment to capital investments in our USW plants is designed to be about equal to the amount Goodyear will spend on the new Mexican plant. It is in addition to the $700 million commitment in the current labor agreement and 2015 cap-ex budget.”

Goodyear did not confirm the USW's figure of $500 million in additional spending, but acknowledged it did commit to additional investment, saying:

“The demand for HVA tires in North and Latin America is projected to grow significantly over the next several years. Goodyear and the USW are committed to strengthening Goodyear's U.S. manufacturing environment in order to satisfy that demand and meet our customers' needs.

“Our previously announced capital commitments to Goodyear manufacturing facilities in the U.S.—as well as new and expanded investments that extend through the end of our next labor contract which were referenced by the USW last week—will support our ability to respond to the high demand.”

Goodyear added that it has invested more than $1 billion over the past decade to upgrade its manufacturing facilities in North America to accommodate more HVA production.

The USW represents workers at Goodyear's car/light truck tire plants in Gadsden, Ala.; Topeka, Kan.; and Fayetteville, N.C.; as well as the company's truck and aircraft tire factory in Danville, Va., and its race tire plant in Akron. Goodyear's car tire plant in Lawton, Okla.—its largest in the U.S. with 2,800 employees—is a non-union facility.

The USW statement also included a reference to the Goodyear plants represented by the union: “Additionally our USW facilities will be protected through the next labor agreement cycle, and the opportunity to further grow and expand those facilities will be open for negotiation.”

The USW, whose master contract with Goodyear expires in 2017, said initially it was disappointed but not surprised by Goodyear's decision to build a plant in Mexico.

From day one, the union said, it was clear to the union that Goodyear's announcement that it was going to build a new plant in “the Americas” was simply a code meaning the plant was destined to be built in Mexico.

“USW members at Goodyear have been willing partners and have repeatedly shown their commitment to championing the success of the company,” said USW International President Leo W. Gerard.

“Together we worked hard to help turn the company around, and the USW has led the fight to stop a flood of unfairly priced tires from China.”

USW Secretary-Treasurer Stan Johnson, who heads the union's rubber and plastics sector, added: “Our efforts have significantly contributed to the return to prosperity for the company's North American operations. That makes Goodyear's decision particularly troubling.

“Unfortunately, in today's world of manufacturing and finance, that's increasingly the decision corporations make. Our trade policies drive our companies to produce outside the United States with Wall Street reaping the benefits.”

The USW also said it is in contact with its counterparts in Mexico and is having discussions to insure the company recognizes the rights of workers in Mexico to join a union of their choice without interference from the company.

Source: tirebusiness.com