It appears that Goodyear Tire & Rubber’s will close its passenger car and light commercial vehicle tyre factory in Philippsburg, Germany by the end of next year, subject to consultation with relevant employee representative bodies. A ‘Form 8-K’ report published by the United States Securities and Exchange Commission on 20 October states that Goodyear “expects to be substantially complete with this rationalisation plan by the end of 2017,” and estimates total pre-tax charges associated with the plant closure will be “between US$240 million and $280 million.”
These pre-tax charges include $165 million to $190 million in cash charges, primarily for associate-related and other exit costs, and $75 million to $90 million in non-cash charges related to accelerated depreciation and other asset-related charges. Goodyear Tire & Rubber expects to record $116 million of pre-tax charges in the third quarter of 2016 and approximately $20 million of pre-tax charges in the fourth quarter of 2016 associated with this plan. The majority of the remaining charges will be recorded in 2017.
Once completed, the tyre maker anticipates this action will improve its Europe, Middle East and Africa’s segment operating income by approximately $20 million in 2018 and $30 million on an annualised basis thereafter.
Category: Company News