After the tire manufacture Goodyear announced plans to open a plant in Mexico, officials for the United Steelworkers (USW) Friday called the move disappointing but not surprising.
“USW members at Goodyear have been willing partners and have repeatedly shown their commitment to championing the success of the company,” USW International President Leo W. Gerard said in a statement. “Together we worked hard to help turn the company around, and the USW has led the fight to stop a flood of unfairly priced tires from China.”
Goodyear Chief Executive Officer Richard J. Kramer however argued the move will help serve the company’s customer base and will actually help already existing plants in North America.
“Our new factory will provide us with a world-class manufacturing asset and will be a strong complement to our existing plants in North America and Latin America,” Kramer noted in a statement. “The new plant advances our strategy to serve the needs of our customers and is consistent with our focus on investing in high return projects that drive profitable growth.”
The union claims it is responsible in encouraging the company to keep investing in existing plant in the United States.
“We have been able in these discussions to secure significant and specific capital improvement and expansion commitments from the company to ensure that existing USW plants continue to be a vital and expanding part of the company’s manufacturing footprint,” USW International Vice President Tom Conway said in a statement.
“Additionally our USW facilities will be protected through the next labor agreement cycle, and the opportunity to further grow and expand those facilities will be open for negotiation,” Conway added.
The new plant is expected to begin production sometime in 2017 and will eventually employ about 1,000 workers. Goodyear is not the first company in the auto industry to decide to move to Mexico recently. Last week Ford announced it will be investing $2.5 billion in a new engine and transmission plants in Mexico.
The decision to move to Mexico is likely due in part to the increasing difference between the costs of labor in the United States compared to Mexico. According to The Boston Consulting Group, Mexico is now less expensive than China when it comes to manufacturing.
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