Nov 2 2006
The Goodyear Tire & Rubber Company announced the planned closure of its tire manufacturing facility in Tyler, Texas, as part of its previously announced strategy to exit certain segments of the private label tire business.
At the time of its June private label announcement, Goodyear said that the decision would require a corresponding reduction in North American Tire'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 Tire. "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 minimize the impact on Goodyear's customers.
Goodyear previously announced to investors an aggressive strategy to reduce costs by more than $1 billion by 2008, including reduction in high-cost tire manufacturing capacity. The Tyler plant principally produces small diameter passenger tires, 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 $50 million after tax, and result in a restructuring charge of between $155 million and $165 million after tax. The cash portion of these charges is estimated to be between $40 million and $50 million.
Opened in 1962, the plant has produced approximately 25,000 passenger and light truck tires per day.