CHICAGO (Reuters) -- Goodyear Tire & Rubber Co.'s largest union has rejected the tire maker's latest contract offer, and union officials said on Thursday that job security and health care remain key issues as they formulate their counterproposal.
Goodyear's offer came on Wednesday as talks resumed afterbreaking off in late June. The United Steelworkers of America, which represents nearly 19,000 Goodyear employees at 14 U.S. plants, said on Thursday it plans to make a counterproposal as soon as possible.
Union spokesman Wayne Ranick said in a telephone interview that job security remains a key issue as well as health care for current employees and 22,000 retired Goodyear workers.
Akron, Ohio-based Goodyear has lost $1.3 billion in the past two years and is expected to lose money again this year.
It told investors in late April that it plans to cut costs by about $1.0 billion to $1.5 billion by 2005 in order to turnaround the company. As part of that effort, it is seeking wage and benefit concessions from the Steelworkers.
Labor contracts expired April 19 at plants that make Goodyear and Dunlop tires and ended July 5 at those that make Kelly-Springfield tires. The previous labor agreements have been extended on a day-to-day basis since then, although either side can end that with a 72-hour notice.
The company has already eliminated its dividend, stopped matching 401(k) retirement contributions, refinanced loans and put its chemicals unit on the block.
Contract negotiations, which began five months ago, ended when the two sides failed to meet a June 27 deadline. Talks resumed Wednesday with Jon Rich, president of Goodyear's North American Tire unit, addressing union negotiators in the morning and the company presenting a contract offer in the afternoon.
The USWA said it immediately notified Goodyear that the proposal was unacceptable.
The union, on its Web site, said Rich's talk Wednesday mentioned bankruptcy more often than job security.
"Your union negotiating committee is not ready to cut off this bargaining opportunity yet, but is quickly reaching a line in the sand," the USWA said. "Without true security for our plants, there will be no contract."
Goodyear said Rich indicated in his talk that "he would not sign an agreement that would not allow Goodyear the financial capability and flexibility to be successful."
"There is no job security of any kind unless the company can compete and win in the marketplace," said Goodyear spokesman Chuck Sinclair. "That's all part of what we're trying to achieve for both sides."
The USWA's Ranick said the union is still hopes to reach an agreement "that addresses our concerns but also allows the company to get back on track."