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Goodyear shares hit new high following tentative deal with striking workers

Goodyear shares hit new high following tentative deal with striking workers

Goodyear Tire & Rubber Co. shares hit a new 52-week high on Tuesday following last week's announcement that it reached a tentative agreement with the United Steelworkers, a deal that may end a three-month old strike.
Goodyear shares rose 40 cents, or 2 percent, to close at $20.12 on the New York Stock Exchange. Goodyear shares had traded within a 52-week range of $9.75 to $19.75.
The proposed three-year labor contract was announced Friday after the market closed.
"The potential new labor contract clears the way for GT (Goodyear Tire) to take critical steps to improve its capital structure," JPMorgan analyst Himanshu Patel said Tuesday in a research note.
About 12,600 active union workers in the United States and another 1,400 Steelworkers considered inactive, including those on layoff, will have an opportunity to vote on the contract agreement on Thursday.
The strike began Oct. 5. The world's third-largest tiremaker and the union reached the deal after both sides resumed talks in Pittsburgh about a week ago.
Goodyear agreed to put $1 billion (euro760 million) into a fund to manage retired union workers' medical benefits, which was higher than the company's previous $660 million (euro500 million)offer but less than the union's call for roughly double that amount. Patel said the deal could reduce Goodyear's health care liability.
According to Patel, the tentative agreement includes a two-tier wage structure which reduces labor costs for new hires to about $25 (euro18.95) an hour including benefits, from about $40 per hour, including benefits.
The deal allows Akron-based Goodyear to stick with its plans to close the plant in Tyler, Texas, but not immediately. It provides for a one-year transition period during which workers will have the opportunity to take advantage of retirement buyouts. The plant employs 1,100 workers.
Goodyear on Oct. 30 announced it was planning to shut down its unprofitable Tyler plant that makes wholesale private label tires. The plant's fate had been a key difference in negotiations. But the plant's life span could not be won beyond the end of 2007, the union said.
Goodyear has about 80,000 employees and makes tires, engineered rubber products and chemicals in 29 countries.
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On the Net:
http://www.gkdsolidarityexpress.org
http://www.goodyearnegotiations.com


Updated : 2021-08-06 06:09 GMT+08:00