The latest news out of Detroit is that automakers might run into some tire shortages should the recent walkout by Goodyear workers continue for more than a few weeks. Adding to that problem was yesterday's news of an additional 300 hourly workers being laid off at a North Carolina plant, because of the strike. This plant was not one of those on strike, but they produce wire used in the manufacturing of tires at other affected plants. Goodyear plans to bring these workers back when the strikers return.
As we told you last week, 15,000 Goodyear Tire & Rubber Co. union workers went on strike after their contract was terminated. The strike has affected 16 North American plants, but Chrysler and GM have both said they had stockpiled a supply in anticipation of the strike. Non-union plants and salaried workers are being used to maintain at least some production. GM has said that it has a 30-day supply of tires on hand, but to put that in perspective, they go through 8 million Goodyear tires every year. Every North American automaker currently uses Goodyear tires.
No new talks are scheduled in this ongoing saga. Goodyear had proposed contract changes that would make the tire manufacturer more competitive by lowering its costs, particularly the costs related to maintaining such a large workforce. Recent notable sore spots like health care and pension funding were at the top of the list of proposed cuts. Worker productivity was sighted in the contract proposals, and the union countered that substantial cuts were already made to wages and other worker's benefits in 2003, and that further reductions were just plain unacceptable. We'll keep you updated on who blinks first.
[Sources: Reuters, Automotive News]