The Goodyear Tire & Rubber Company on Wednesday said it would close a high-cost tyre plant in the United Kingdom as part of its strategy to reduce costs in its worldwide operations.
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The company begun the process of closing its Goodyear Dunlop Tyres UK passenger tyre factory in Washington, where it has begun consultation with union representatives.
“This action is expected to create annual savings of approximately $US20m and result in charges of between $75m and $85m ($55m to $65m after-tax). The cash portion of this charge is estimated to be $35m to $40m.
Goodyear will also cease production of bicycle tyres and inner tubes at its Debica, Poland, facility.
Cost reduction actions in logistics, retail and administration will be taken in the company’s European Union, Asia Pacific and Engineered Products business units.
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By GlobalDataIn total, the actions are expected to eliminate about 1,500 jobs, create annual savings of between $40m and $50m ($30m to $40m after tax) and result in a charge of between $105m and $115m ($75m to $85m after tax).
Of the total charge, approximately $55m ($40m after-tax) will be recognised in the first and second quarters of 2006.
The cash portion of these charges is estimated to be between $60m and $65m.
