Tuesday, July 31st, 2007
Union OKs new pact
By Janie Southard
United Steelworkers ratified a contract last weekend with The Carlyle Group clearing the way for Carlyle's purchase of Goodyear's Engineered Products Division for $1.475 billion.
Effective Wednesday that division will be known legally as EPD Inc., but otherwise will operate as Veyance Technologies Inc., as will be displayed on the sign at the St. Marys plant, according to Gary Glass, president of the St. Marys USW Local 200.
Veyance is a contrived word from the motto "conveying performance and growth."
"Carlyle purchased the right to use the Goodyear name and logo on products for the next 20 years. But they will do business as Veyance Technologies Inc.," Glass told The Daily Standard on Monday morning.
Outstanding issues crowded out ratification last week even though the four union plants in the 32-plant division had approved the tentative agreement. Those issues centered around establishing a secure trust for retiree health care completely separate from the one at Goodyear, according to press release from USW headquarters in Pittsburgh.
Glass said the Voluntary Employee's Beneficiary Association (VEBA) was one of the holdups.
As explained on an Internet site, VEBA is a tax-exempt trust, a 501(c)(9). The purpose is to enable the employer to make tax-free deposits on the employee's behalf to the plan, to credit the employee's account with tax-free investment earnings and to enable the employee to get tax-free reimbursements for qualified medical expenses and insurance premium payments.
Following the 12-week USW strike last year, Goodyear settled about $1 billion in a VEBA for all its union plants, including the tire plants as well as the four Engineered Products Plants. Those four plants, which now have been sold, will take only a very small portion of the large VEBA with them when they become Veyance Technologies.
"We call our plan a mini-VEBA, but that's not an official name," Glass said.
The fix was the $7.5 million Goodyear agreed to add to the mini-VEBA and the fact that the union will have its own board of directors separate from Goodyear's.
The new union contract begins on the date Goodyear completes the sale to EPD and expires on July 31, 2012. The Goodyear division has about 6,500 employees in 32 countries who make hoses, belts and fittings for cars and trucks as well as certain military components.