Closing Tyler to Save $50 million
Following Goodyear’s announcement that it will close its Tyler, Texas plant by the middle of next year, analysts are estimating that the company will save $50 million after tax. The analysts describe the United Steelworkers’ response as “not surprisingly negative,” adding: “we would expect the Steelworker’s strike against Goodyear to continue.” Goodyear has 12 tyre plants in North America, 8 of which are organized and represented by the Steelworkers. Goodyear’s announcement is consistent with previously announced plans to reduce private label shipments by 8 million. The Tyler plant has capacity of 9 million tyres annually.
The news that Goodyear will shutter Tyler follows the closure of one-and-a-half plants by Michelin (Kitchener and 40 per cent of Opelika – capacity of 9 million units), the Oklahoma City plant by Bridgestone (12 million units), and Continental’s Charlotte plant (7 million passenger tyres) after Mayfield 18 months ago (5 million units). Thus, so far this year, the industry has announced the closure of 36 million tyres worth of capacity, Deutsche Bank calculated. This is equivalent to almost 10 per cent of the North American demand.
The analysts described the industry-wide production cut as “a strong indication that the industry wants to remain disciplined on prices.”