Goodyear to ‘Explore’ EMEA, Latin America Farm Unit Sales
Goodyear Tire & Rubber Company has announced plans that would end consumer tyre production at its Amiens, France plant and could result in the sales of its European and Latin American agricultural tyre businesses. Goodyear’s Asia Pacific farm tyre business is not included in the potential divestiture. The company sold its North American farm tyre operation in 2005.
According to an official statement, ending consumer tyre production at the Amiens plant would result in the reduction of approximately 6 million units of production, which is part of Goodyear’s strategy to remove 15 million to 25 million units of capacity over the next two years.
Referring to the Amiens plant closure, Serge Lussier, Goodyear’s Europe, Middle East & Africa (EMEA) vice president of manufacturing said: “This action is a result of the plant’s uncompetitive costs. Reaching a union agreement to modernize the operation proved impossible. Due to high costs and weak industry demand, the consumer tyres produced there are uncompetitive in the marketplace.” The action, which is expected to be complete by the third quarter of 2010, would result in a reduction of approximately 820 of the 1,200 total positions at the plant, which also produces farm tyres.
Production at a second tyre plant in Amiens, employing about 1,000 people, would not be impacted by this action. The company currently employs approximately 3,500 people in France.
Charges associated with the plan are estimated at $55 million (approximately $30 million after taxes and minority interest), the majority of which will be recorded in the second quarter of 2009. These charges primarily relate to cash severance payments that will be made as actions are taken in the future.