Tuesday, July 24th, 2007
Goodyear buyer plans to walk if no union contract
By Janie Southard
ST. MARYS - Carlyle Group will walk away from the sale of Goodyear's Engineered Products Division if the four union plants involved do not ratify the proposed contract being voted on today and Wednesday, according to United Steelworkers (USW) spokesmen.
"If they vote this down, Carlyle has said they will walk away from the deal entirely," Wayne Ranick, a spokesman at the United Steelworkers' headquarters in Pittsburgh, said late Monday afternoon as a means of correcting a statement he made last week.
On Saturday The Daily Standard published a quote from Ranick, who incorrectly stated that, if the contract is voted down, all parties would "return to the bargaining table." Ranick called the newspaper late Monday, saying his statement was incorrect.
Gary Glass, president of the St. Marys USW and one of the negotiators of the tentative agreement, told The Daily Standard this morning that Carlyle was "right up front" in the negotiations saying they would walk away from the deal if the contract goes down.
"Carlyle Group financed most of the deal, and they told us their financing options would run out on Aug. 1," Glass said.
Carlyle, an investment group, made an offer in March to purchase the four Goodyear plants, including St. Marys, for $1.475 billion, as long as a contract is approved by the union. EPD would be the legal name for the division under Carlyle.
Included in the terms of the sale is that EPD is free to use the Goodyear name and trademark for the next two decades. The company will be managed by Goodyear personnel in Akron.
Should this contract fall through, the union president said there are other potential buyers in the picture.
"But I think Carlyle has a very good offer on the table ... Yes, you'll always have a few (who disagree). But I believe the majority of our members are in favor," Glass said.
Christopher Ullman, director of global communications for The Carlyle Group in Washington, D.C., told The Daily Standard this morning: "We spent months negotiating a new master contract, which we believe is good for the union and EPD. We are confident that the agreement will be ratified." He added that Carlyle's "total focus right now is on ratification."
Successorship language in the current USW/Goodyear contract stipulates that any such sale can only be finalized after the buyer negotiates an acceptable contract with the union.
All four union plants are voting on the contract, with the final votes cast on Thursday. The final vote will be released on Friday morning, according to Glass.
The tentative agreement provides among other items a renewal of the successorship language, a 90 percent union head count guarantee for the five-year term of the contract, a $850 signing bonus and an increased pension multiplier.