Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Goodyear Held Hostage by French Union Demands

After French workers seized their bosses at a Goodyear Tire & Rubber (NASDAQ: GT  ) plant in Amiens on Monday in a bid to extort the highest possible severance pay out of the company for closing the factory, it brought to mind that perhaps Maurice "The Grizz" Taylor, CEO of tire manufacturer Titan International, knew what he was talking about when he excoriated French workers last year following attempts to get him to buy the plant.

As Taylor colorfully and memorably wrote to France's industry minister at the time, "How stupid do you think we are? The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three." He concluded by saying, "You can keep the so-called workers." 

Certainly not a standard-bearer for civility, Taylor nevertheless realized the difficulty in operating a business in France, where labor laws make the government a not-so-silent partner in all operations. A bill that wended its way through the French parliament last year would have actually granted union members amnesty for trashing corporate offices and threatening executives with bodily harm.

No wonder the Goodyear employees felt they could take their bosses hostage with impunity. Current law says boss-napping is punishable by a five-year prison sentence and a 75,000 euro ($102,000) fine so long as the executives are released unharmed in under a week, but workers are rarely prosecuted, the Associated Press says.

Executives from 3M, CaterpillarHewlett-Packard, and Sony have all been taken hostage by French workers over the past few years.

Last year the French union filed a lawsuit in Ohio to force Goodyear to keep the factory open, apparently since French courts have ruled that yes, businesses can really close factories. Now the workers say they've come to the realization there is no hope of keeping the Amiens plant open, and the union president said, "So we decided to change tactics and fight for the largest compensation possible."

The union previously refused Goodyear's efforts to restructure production at the Amiens plant because the tire maker said profit margins had narrowed and the European tire business wasn't sustainable. When it moved to cut workers, the union sued. Goodyear was left with little choice but to close the plant.

The union is demanding the 1,250 employees receive 80,000 euros ($108,000) plus 2,500 euros ($3,400) for each year worked, according to the AP. Goodyear has offered them 27,000 euros, but it had offered them 80,000 euros when the tire maker first discussed plant closings with the union several years ago, but the offer was rejected. Now they're back looking for a second bite at the apple. It's not yet clear whether their tactic was effective; as of Tuesday afternoon, the managers had been freed by police. 

When India's Apollo Tyre moved to acquire Cooper Tire & Rubber last year in a $2.5 billion deal, it was because slack demand in India and Europe made it desirous of entering the more robust U.S. market. Despite both sides agreeing to the merger, it went famously bust last month amid recriminations and promises of lawsuits to come, and it hasn't changed the underlying dynamics of the market.

The long, sorry history of labor relations in France attests that it's not a country you want to be doing business in. As the latest PMI figures out of the eurozone show, while virtually every other country is witnessing growth, France continues to wither, tumbling to a seven-month low. Even Greece hit a 52-month high and nearly reached the stabilization point to cross over into expansion territory.

The union is doing itself and the French economy no favors by resorting to such extreme negotiating tactics, and you might rightly question the sanity of an executive who chose to locate there.

There's still plenty of drive left in the auto industry
U.S. automakers boomed after WWII, but the coming boom in the Chinese auto market will put that surge to shame! As Chinese consumers grow richer, savvy investors can take advantage of this once-in-a-lifetime opportunity with the help from this brand-new Motley Fool report that identifies two automakers to buy for a surging Chinese market. It's completely free -- just click here to gain access.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2786264, ~/Articles/ArticleHandler.aspx, 8/31/2015 12:54:18 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rich Duprey

Rich has been a Fool since 1998 and writing for the site since 2004. After 20 years of patrolling the mean streets of suburbia, he hung up his badge and gun to take up a pen full time.

Having made the streets safe for Truth, Justice and Krispy Kreme donuts, he now patrols the markets looking for companies he can lock up as long-term holdings in a portfolio. So follow me on Facebook and Twitter for the most important industry news in retail and consumer products and other great stories.


Today's Market

updated 2 days ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
GT $29.52 Up +0.58 +2.00%
The Goodyear Tire… CAPS Rating: ***