So Far, Goodyear Tire & Rubber Co.'s massive strike hasn't punctured its stock.

That is surprising, given that the labor dispute -- and the idling of well over 12,000 workers in 16 U.S. and Canadian factories -- is going to cost the company millions just as it was starting to show steady gains in its turnaround.

After skidding the first day of the strike, which began Oct. 5, the stock revived and has hovered above $14 ever since. Goodyear Tire & Rubber's shares closed Friday at $14.70 on the New York Stock Exchange, up 25 cents, for a market capitalization of $2.6 billion.

Goodyear's stock is being bolstered by two things: The belief by investors that Goodyear's unionized workers will be forced to make big concessions, as has happened in other labor battles recently, from the airlines to auto parts. And signs that the tire business in general is poised for a boost from falling oil prices.

"I think most of us expect management will be able to reach a satisfactory arrangement with labor that will include lower costs and improved productivity," says George Putnam III, president of New Generation Advisers Inc., a Boston hedge fund that owned 322,000 shares of Goodyear as of June 30.

"This may be just a necessary step in the restructuring of the U.S. operations," Mr. Putnam adds. "We don't set targets, but I'd hope to see the stock in the low 20s at least over the next year or so." Mr. Putnam also doesn't expect the strike to last long.

Goodyear's management has made clear it is hunkering down for a battle. On Oct. 13, the company announced it had borrowed $975 million -- "additional cash in the unlikely event of a prolonged strike," Chief Financial Officer Richard Kram said in a statement.

The company also laid off 300 hourly workers at its Asheboro, N.C., steel-wire factory, which isn't part of the strike, another indication the tire maker is preparing for a lengthy strike. The plant makes wire used by Goodyear tire factories across North America.

The strike erupted after Goodyear and its union failed to negotiate a new three-year contract to replace one that expired in July. The previous agreement had been extended day-to-day until early this month, when workers announced an impasse and went to the picket lines.

John Murphy, an analyst at Merrill Lynch, issued a "sell" rating on the stock just before the strike and says he is surprised by its resilience. (Merrill Lynch says it owns "one percent or more" of Goodyear's stock.)

"It looks like there's a contingent out there that believes, somewhere down the road, the company will break the union or get concessions close to what they're asking for in their proposal," he says.

Mr. Murphy notes that the market also appears to be factoring in the improved fundamentals for the broader tire industry. Increases in raw-material prices -- driven partly by oil -- appear to be moderating, and many expect sales of replacement tires in the U.S. to strengthen as people drive more.

The main sticking point in the dispute is over Goodyear's insistence that it have the ability to close two of the 12 unionized facilities covered by the new agreement. (Four factories besides the 12 covered by the contract have joined the strike.)

Analysts estimate that shutting two plants could save the tire maker $100 million a year. The larger goal for Goodyear is to get costs down so they are more in line with competitors, who increasingly supply the U.S. with tires made in low-cost foreign factories or from nonunion domestic plants.

Goodyear's workers appear willing to let the strike drag on. The United Steelworkers union, which represents them, contends that its members already made big concessions to the company in 2003, when they last negotiated a contract. It was those savings, the union says, that helped save Goodyear from bankruptcy. Now that the company is doing better, the union wants its workers to share in the good times.

How long the strike lasts is a key question. One analyst has estimated the strike is costing Goodyear a painful $2 million a day. But that price tag could escalate sharply if the labor dispute stretches longer than a month, and the company has to take costly measures to keep the flow of products going to its customers.

Goodyear says it is meeting demand through a combination of using white-collar employees to run its plants, stepped-up imports and drawing down its existing inventory of tires.