Goodyear plant to close, eliminating 1,900 jobs

Goodyear's Union City, Tenn., plant to close, eliminating 1,900 jobs

Tom Bailey Jr.
CommercialAppeal.com
February 10, 2011

Goodyear's plant manager placed its bad-news call to City Hall at 7:58 a.m. Thursday: The Union City plant where 1,900 employees make radial tires will close by year's end.

"We were just all surprised, I guess," City Clerk Carolyn Moran said, adding most everyone in this border town of 10,200 knows someone who works at the plant four miles north of City Hall.

Union City sits at the Kentucky line, 115 miles northeast of Memphis. The area unemployment rate is 9.9 percent.

Goodyear's fourth-quarter earnings report, released Thursday, disclosed the Akron, Ohio-based company will take a one-time $160 million charge related to the plant closing.

Goodyear Chairman and CEO Richard Kramer said in the release: "While we are committed to manufacturing in North America, all of our plants must be cost-competitive and be able to demonstrate sustainable, world-class productivity."

"That is not the case with this plant, and as a result, the market has moved beyond what the factory is able to build."

The news confirmed the fears of many in the region.

"I guess it's a surprise that it happened as soon as it happened, but we all had known because of its unprotected status that something like this could happen," Mayor Terry Hailey said.

He referred to the last contract agreement between Goodyear and the United Steelworkers, which didn't protect the plant from shutting down.

"Obviously, it's a severe blow to the community," said Hailey, a local radio station manager who's been part-time mayor the past 22 years.

The effects of the closing will radiate beyond Union City and Obion County; workers commuted from the entire region, Hailey said.

In Nashville, state Rep. Bill Sanderson of nearby Kenton rose on the House floor to express his disappointment, pointing out that the closing imperiled not only jobs at the factory, but also at businesses that depended on Goodyear's operations. "Hundreds of millions of dollars" would be lost in the region because of the closing, the Republican said.

Gov. Bill Haslam said the Goodyear closure is a "huge hit" for an area already plagued by high unemployment.

"I don't know yet what we can do but I can promise you we're going to focus a lot of attention there," Haslam said after a luncheon speech Thursday.

"We obviously haven't had time to put a strategy in place there but we understand how serious that is for the area and we will work hard at trying to alleviate that," the governor said.

A United Steelworkers Local 878L official declined to comment until all its members had been informed of Goodyear's announcement.

But the local posted a message on its website Thursday:

"This morning Plant Management called the Union Negotiating Committee to the plant and announced intentions for plant shutdown. "They will be announcing this to the members today. Plans are to run at the current production levels until towards the end of the year. There are no plans for a ramp down in production levels."

The plant opened in 1968, Hailey said.

Union City still has other substantial employers, including a Kohler plumbing fixtures plant, Tyson Foods, a Lennox Hearth Products plant, and Williams Sausages.

"Hopefully, we can attract somebody else as soon as we can," Hailey said. "We certainly will have an available workforce.

Man alive.

I'm starting to realize something here. This lousy economy has created an "employers market", meaning that things are more favorable to them than not. Employees lose.

This means that when unions start pushing back hard against corporations, they're ultimately going to lose via the company closing their doors. There's been numerous cases of this in the last year.