just-auto.com

US: Goodyear axes Texas plant and 1,100 jobs

By just-auto.com editorial team | 30 October 2006

Goodyear Tyre & Rubber Company on Monday announced the planned closure of its tyre manufacturing facility in Tyler, Texas, as part of its previously announced strategy to exit certain segments of the private label tyre business.

At the time of its June private label announcement, Goodyear said that the decision would require a corresponding reduction in North American Tyre's manufacturing capacity and that plant performance, capabilities, cost savings opportunity and the focus on serving NAT customers would dictate capacity reduction.

"We must take the steps necessary to reduce our costs and improve our competitive position," said Jon Rich, president, North American Tyre.

"While this is an extremely difficult decision for everyone involved, it was required to help turn around our North American business."

Rich said the timing of the action would be coordinated to minimise the impact on Goodyear's customers.

Goodyear previously announced to investors an aggressive strategy to reduce costs by more than $US1bn by 2008, including reduction in high-cost tyre manufacturing capacity. The Tyler plant principally produces small diameter passenger tyres, a segment that has been under considerable pressure from low cost imports.

The action is expected to eliminate about 1,100 positions, create annual savings of approximately $50m after tax, and result in a restructuring charge of between $155m and $165m after tax.

The cash portion of these charges is estimated to be between $40m and $50m.

Opened in 1962, the plant has produced approximately 25,000 passenger and light truck tyres per day.