AKRON Analysts: Goodyear strike isn't likely

Union officials are pushing for more management cutbacks.
AKRON (AP) -- Analysts say a strike is unlikely at Goodyear Tire & amp; Rubber Co. even though the Steelworkers union rejected an offer and broke off contract talks over the weekend.
"The incentive not to strike is you want to keep this company out of Chapter 11," said Rod Lache, an analyst with Deutsche Bank. "With a strike, you could push them right over the edge."
Goodyear, the world's largest tire company, reported a record $1.1 billion loss for the last fiscal year.
The company wants to trim as much as $1.5 billion in costs by 2005 to shore up its North American tire operations and control costs so it can compete with overseas plants.
Company spokesman Chuck Sinclair said Monday that informal discussions would continue but no new talks had been planned. The union said it is prepared to strike if necessary.
Effect on stock
The interruption in negotiations sent Goodyear shares down 34 cents, or 6 percent, Monday to close at $5.25 on the New York Stock Exchange.
Union spokesman Wayne Ranick said the company's final offer was unacceptable.
He said Goodyear wants to slash away at health care for employees and retirees rather than address plant costs.
"If they want to cut costs, they have to address all the fat that exists in their managerial ranks from the shop floor to the corporate offices," Ranick said.
David Bradley of J.P. Morgan said that because wage and benefit cuts are expected in the new contract, the union may choose to drag out negotiations to keep the old contract in place for as long as possible.
"There may be perverse incentive to stretch it out," Bradley said. "Goodyear may put its foot down and make unilateral wage and benefit reductions if the union stalls indefinitely. That's the sort of event that could trigger a strike."
But Ranick said a delay wouldn't benefit anyone.
One view
"This company needs to come to a labor agreement," he said. "They need to start putting some good quarters together. We can't stay in the current mode because the current mode is just a death spiral."
The union's contract expired April 19 but had been extended day to day while talks continued. It covers 14 plants in Ohio, Virginia, North Carolina, Illinois, Alabama, Nebraska, Wisconsin, New York, Kansas, Texas and Tennessee.
The agreement remained in effect Monday. Both sides agreed to a three-day notice before it can be terminated.
The Pittsburgh-based union represents more than 19,000 active Goodyear workers and 22,000 retirees. It wants to negotiate a contract that could be applied to other rubber companies, including Bridgestone-Firestone and Michelin.