The Associated Press

AKRON - Goodyear Tire & Rubber Co., in a possible signal to union workers who will soon vote on a new contract proposal, said Thursday that it will eliminate about 500 salaried and nonunion jobs at its North American tire operations in a cost-cutting move.

"When we announced our turnaround plan at the end of last year, we said that difficult decisions would be required," Jon Rich, president of Goodyear's North American Tire business unit, said. "This is one of those very difficult actions, but it is absolutely necessary to achieve our cost reduction objectives."

The cuts of management and staff positions will be achieved by the end of September at manufacturing plants throughout North America. Company spokesman Chuck Sinclair said the cuts will come from about 2,600 employees salaried or in non-bargaining unit positions.

Earlier this year, Goodyear eliminated about 700 salaried positions, the majority of which were at its Akron headquarters.

The cuts were expected from the financially struggling Goodyear, which lost $236.9 million, or $1.35 a share, for the first half of the year. Goodyear shares rose 8 cents Thursday on the New York Stock Exchange to $6.62.

The company makes tires, engineered rubber products and chemicals at more than 90 plants in 28 countries. It employs about 92,000 people.

Goodyear's turnaround plan includes reducing costs by $1 billion to $1.5 billion by the end of 2005 and possibly selling some non-tire businesses.

The company reached a tentative contract agreement Aug. 20 with the United Steelworkers of America, which represents at least 16,000 employees at plants in Ohio, Virginia, North Carolina, Illinois, Alabama, Nebraska, Wisconsin, New York, Kansas, Texas and Tennessee.

The three-year deal, expected to be a tire industry pattern, will be voted on by union members in September.

Goodyear agreed in the proposal to give the Steelworkers a seat on its board of directors as part of the deal, which is unprecedented for the tire industry, a union member said Thursday.

The offer is "a very good gain for the Steelworkers," said Jack Hefner, vice president of Steelworkers Local 2 in Akron.

Sinclair refused to comment on specifics of the deal until a vote is taken.

The contract also includes what Hefner said is a partial wage freeze that only allows for cost of living increases.

The cuts announced Thursday were expected, Hefner said.

"It's a give and take and this is part of their give," Hefner said. "We hate to see anybody lose their job, but when you're overstaffed, you're overstaffed."