Goodyear Tire and Rubber, the world's third-largest tiremaker behind Bridgestone and Michelin, will ramp up production following the resolution of a nearly three-month-long strike -- but hard feelings remain between management and their unionized employees. The new agreement with the United Steelworkers union, which will affect approximately 14,000 workers, provides for a $1 billion healthcare program for retirees, but will also shutter a factory in Texas. It is expected to save the company $610 million over three years and $300 million a year thereafter. Although the contract was ultimately approved by all 12 locals across 10 states, much animosity was created between management and workers during the strike, souring a previously positive relationship. Now that the strike has ended, Standard & Poor's has affirmed its 'B+' rating on Goodyear's corporate credit and removed Goodyear's debt from negative CreditWatch.
• Sources: Reuters, Business Week, LA Times
• Related commentary: Strike Has Yet to Dent Goodyear's Stock, Most Overbought/Oversold S&P 500 Stocks, Auto Suppliers' Troubles Point To Broader Industry Challenges
• Potentially impacted stocks: Goodyear Tire and Rubber Company (NASDAQ:GT). Competitors: Cooper Tire and Rubber (NYSE:CTB), Bridgestone Corp. ADR (OTCPK:BRDCY), Continental AG (OTCPK:CTTAY), Michelin Group (Euronext: ML)
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