Goodyear's Union City, Tenn., plant to close, eliminating 1,900 jobs

Memphis Commercial Appeal ^ | February 10, 2011 at 10:45 p.m. | By Tom Bailey Jr.

[DeaconBenjamin]

Goodyear's plant manager placed its bad-news call to City Hall at 7:58 a.m. Thursday: The Union City plant where 1,900 employees make radial tires will close by year's end.

"We were just all surprised, I guess," City Clerk Carolyn Moran said, adding most everyone in this border town of 10,200 knows someone who works at the plant four miles north of City Hall.

Union City sits at the Kentucky line, 115 miles northeast of Memphis. The area unemployment rate is 9.9 percent.

Goodyear's fourth-quarter earnings report, released Thursday, disclosed the Akron, Ohio-based company will take a one-time $160 million charge related to the plant closing.

Goodyear Chairman and CEO Richard Kramer said in the release: "While we are committed to manufacturing in North America, all of our plants must be cost-competitive and be able to demonstrate sustainable, world-class productivity."

"That is not the case with this plant, and as a result, the market has moved beyond what the factory is able to build."

The news confirmed the fears of many in the region.

"I guess it's a surprise that it happened as soon as it happened, but we all had known because of its unprotected status that something like this could happen," Mayor Terry Hailey said.

He referred to the last contract agreement between Goodyear and the United Steelworkers, which didn't protect the plant from shutting down.

"Obviously, it's a severe blow to the community," said Hailey, a local radio station manager who's been part-time mayor the past 22 years.

The effects of the closing will radiate beyond Union City and Obion County; workers commuted from the entire region, Hailey said.

In Nashville, state Rep. Bill Sanderson of nearby Kenton rose on the House floor to express his disappointment, pointing out that the closing imperiled not only jobs at the factory, but also at businesses that depended on Goodyear's operations. "Hundreds of millions of dollars" would be lost in the region because of the closing, the Republican said.

Gov. Bill Haslam said the Goodyear closure is a "huge hit" for an area already plagued by high unemployment.

"I don't know yet what we can do but I can promise you we're going to focus a lot of attention there," Haslam said after a luncheon speech Thursday.

"We obviously haven't had time to put a strategy in place there but we understand how serious that is for the area and we will work hard at trying to alleviate that," the governor said.

A United Steelworkers Local 878L official declined to comment until all its members had been informed of Goodyear's announcement.

But the local posted a message on its website Thursday:

"This morning Plant Management called the Union Negotiating Committee to the plant and announced intentions for plant shutdown. "They will be announcing this to the members today. Plans are to run at the current production levels until towards the end of the year. There are no plans for a ramp down in production levels."

The plant opened in 1968, Hailey said.

Union City still has other substantial employers, including a Kohler plumbing fixtures plant, Tyson Foods, a Lennox Hearth Products plant, and Williams Sausages.

"Hopefully, we can attract somebody else as soon as we can," Hailey said. "We certainly will have an available workforce.

[saltlick]

“The answer is to go back to the tariff levels in existence prior to the infatuation with “free trade”.”

“We should be fighting back with high tariffs.”

Yep. See my post#38.

[UnwashedPeasant]

Maybe Zero can fill it with a subsidized solar or windmill plant.

Note very likely. It is a solidly Republican state.

Maybe the plant can be used by a California company. They are all looking for somewhere to go. But "Union City" sounds like more of the same trouble they have in Calif.

[RKV]

This has zero to do with free trade. It has EVERYTHING to do with productivity. You can pay American workers high dollars IF they make a lot of product for the time they spend. If you let the union drive down their productivity, the work is going elsewhere. Period. And you get the secondary effect of the union parasites throwing money at the DEMONrat party, which screws the rest of our liberties. F’in wake up.

[RKV]

Tariffs go both ways. I guess you don’t get that part do you? Think Smoot-Hawley. But then I guess you’re NOT thinking.

[saltlick]

“Tariffs go both ways. I guess you don’t get that part do you? Think Smoot-Hawley. But then I guess you’re NOT thinking.”

I’m not willing to see the downfall of my country to placate those with an obsession to an economic theory.

Free traders have had their chance. It is Tariff Time.

[RKV]

We tried that before and it didn’t work. Learn from history.

[saltlick]

"We tried that before and it didn’t work. Learn from history."

I know you would like to focus on Smoot–Hawley, but let's dig a little deeper into history and take a look at tariffs in some of the 141 years preceding Smoot–Hawley. I am going to assume you knew that the federal income tax was not implemented until 1913, and that "taxes" were levied on foreign goods via tariffs.

From wikipedia:
The Tariff Act of 1789 imposed the first national source of revenue for the newly formed United States. The new Constitution allowed only the federal government to levy tariffs, so the old system of state rates disappeared. The new law taxed all imports at rates from 5 to 15 percent. These rates were primarily designed to generate revenue to pay the national debt and annual expenses of the federal government.

The founding fathers were a smart and visionary bunch. What would they think of the country they founded in its current state? And would they consider bringing back tariffs to save the Nation?

[RKV]

I have done so, having studied economics at graduate level. Not so sure you can say the same. Don’t make assumptions. I know my economic history and know that the the percent of gdp which was consumed by the federal government was generally around 5% prior to ww1. I am well aware of how the gov was funded prior to the 16th amendment. My family has been in the americas since 1620, so the history thing goes with the turf. On your part you have no idea what shutting down what export industries we have left would do - make 10% unemployment much worse is the simple version. Better to send 10 million plus illegals home to Mexico (or elsewhere). That and repeal about a bajillion job killing regulations and make government employee unions illegal.

[dfwgator]

There is no such thing as an “American” corporation, corporations don’t have borders.

[rawhide]

you belly fat, you go now yankee.

Cute! (smile)

[dragnet2]

You like China yum yum?

[saltlick]

"I have done so, having studied economics at graduate level. Not so sure you can say the same. Don’t make assumptions. I know my economic history and know that the the percent of gdp which was consumed by the federal government was generally around 5% prior to ww1. I am well aware of how the gov was funded prior to the 16th amendment. My family has been in the americas since 1620, so the history thing goes with the turf. On your part you have no idea what shutting down what export industries we have left would do - make 10% unemployment much worse is the simple version. Better to send 10 million plus illegals home to Mexico (or elsewhere). That and repeal about a bajillion job killing regulations and make government employee unions illegal."

First, I would like to say thank you for your civilized and informative post. I respect that very much, even though we have some disagreement over tariffs.

1620 is a ways back, for sure. I know some of my family came here in the mid 1800's, but not sure how much further back the rest go. And I've only had one econ course back in undergrad, so it looks like you've out-educated me on economics.

So I'm looking at this from a layman's perspective: When you express the concern for the export industries we have left going under if tariffs are enacted, is the reason you think they will go under from retaliatory tariffs that the nations we have targeted with tariffs will presumably impose on our products? If that is the case, I would guess that some retaliation may occur, but that other exports of ours would be unique/sought-after enough, that retaliatory tariffs would not be levied on all of our exports.

I think the illegals situation is worse in your state, but we are not immune here in the midwest, either.

"That and repeal about a bajillion job killing regulations",
I will def. agree with you there!

[jerry639]

However, it can’t be blamed on Obama.

Seems as though nothing can be blamed on Obama. That is BS. It is happening on his watch so it’s his fault.

[dearolddad]

That's what corporations are for, to make money for the investors. Corporate boards are answerable to the shareholders. It is their company. Corporations are not social engineering experiments. They exist solely for the purpose of making money, and always have..

I am amazed at how many supposedly intelligent people aren't able to grasp this very simple concept.

[itisthetruth411]

The Goodyear plant in Chile is now manufacturing tires for the US market.

It is important to cut costs wherever you can in order to meet Rich Kramer’s $10,000,000 per year paycheck. Not to mention the inflated salaries and all of the high end perks of the rest of the executives.

Let the little people eat cake.

[itisthetruth411]

The Goodyear plant in Chile is now manufacturing tires for the US market.

It is important to cut costs wherever you can in order to meet Rich Kramer’s $10,000,000 per year paycheck. Not to mention the inflated salaries and all of the high end perks of the rest of the executives.

Let the little people eat cake.