Goodyear proposing to cut 400 jobs in Danville

AP, February 18, 2009

 

Goodyear is proposing to cut more than 400 union jobs at its Danville plant among 5,000 to be eliminated companywide this year.

 

Chief Executive Officer Robert Keegan made that announcement Wednesday during a conference call to give the company's earnings report.

The United Steelworkers local that represents the Danville workers has scheduled a vote Thursday on a tentative agreement.

Goodyear has been in Danville since 1966, and is the city's largest employer with about 2,000 workers. It is the largest producer of commercial truck and bus tires in North America as well as aircraft tires.

A Steelworkers spokesman in Gadsden, Ala., said the Danville workers will vote on schedule changes in the part of the plant where truck tires are made.

Goodyear posted a $330 million loss in the fourth quarter and had a 21 percent decline in sales.

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Goodyear cutting nearly 5,000 jobs after 4Q loss

AP, February 18

 

Goodyear Tire & Rubber Co., the biggest U.S. tire maker, said Wednesday it plans to cut nearly 5,000 jobs this year after a sharp drop in sales led to a loss of $330 million in the fourth quarter.

The Akron-based company said demand for new tires is weak as auto sales slump and the market for replacement tires is also down because people are driving less.

The job cuts equal almost 7 percent of the company's work force and follow the elimination of about 4,000 jobs in the second half of last year.

Goodyear's loss in the three months ended Dec. 31 amount to $1.37 per share, compared with a profit of $52 million, or 23 cents per share, a year earlier.

The company lost $1.18 per share, excluding one-time charges or gains, in the most recent quarter. Analysts surveyed by Thomson Reuters expected a loss of $1.03 cents per share on that basis.

Revenue dipped 21 to $4.1 billion from $5.2 billion a year earlier.

The company said the global economy depressed the number of tires sold in the recent quarter by 19 percent.

As a strategy to boost sales, Goodyear said it will step up new product offerings. These include its Assurance Fuel Max tire, which was introduced earlier this month and will go on General Motors' new Chevrolet Volt electric vehicle.

Besides the job cuts, Goodyear is freezing salaries, putting restrictions on some spending and putting in place purchasing strategies aimed at lowering raw materials costs.

Goodyear also plans to reduce its global tire capacity by 15 million and 25 million tires over two years while seeking ways to improve cash flow this year. It is reducing capital expenditures, inventory levels and is looking to sell noncore assets.

Robert J. Keegan, Goodyear chairman and chief executive officer, said the actions reflect new economic realities.

In a conference call Wednesday morning with analysts, Keegan said Goodyear is feeling the impact of a down market for new cars and people driving fewer miles.

"Today's economic uncertainty, the new economic realities of the world and the implications for our industry and for Goodyear are extremely challenging," Keegan told analysts. "The global economic slowdown has increased both in severity and geographic scope throughout the year. By year end, it had a significant impact in volume in each of our major business units."

Goodyear sales in North America were helped by higher tire prices and market-share gains for Goodyear-branded consumer replacement tires.

But fourth-quarter sales at its North American Tire Segment fell to $1.94 billion, from $2.28 billion a year ago, reflecting lower demand and the sale of its T&WA tire mounting business. The segment had a $193 million loss, versus a profit of $40 million the prior year's fourth quarter.

For all of 2008, Goodyear had a loss of $77 million, or 32 cents per share, versus a profit in 2007 of $602 million, or $2.65 per share. The 2007 result included an after-tax gain of $508 million, or $2.19 per share, on the sale of the company's former engineered products business.

Sales last year were $19.5 billion, slightly less than 2007's company record of $19.6 billion.

Keegan wasn't specific about the timing of the job cuts or where they may be made. But he did say adjustments in staffing and hours at some plants could lead to fewer workers, and he praised the United Steelworkers union for its cooperation.

He said the company reached a tentative deal with local Steelworker leadership at Goodyear's Danville, Va. plant to cut capacity and reduce the work force by about 400 people. The agreement will be voted on by the membership Thursday.

Kevin Johnsen, Goodyear contract coordinator and a staff representative with the Steelworkers in Gadsden, Ala., said the Danville plant will vote on schedule changes in the part of the plant where truck tires are made. He wouldn't be more specific until after union members vote.

"We always have concerns about companies laying off members and we'll do everything that we can to protect our members," Johnsen said. "Other than Danville, Goodyear has not come to us and said they are looking at this plant or that plant."

In Goodyear's home city, Akron Mayor Don Plusquellic said he appreciates Goodyear's efforts to remain a financially healthy company.

"My thoughts today are first and foremost with employees who face the loss of their jobs." Plusquellic said. "That's why mayors sought to shore-up the safety net for families as part of the Recovery Act signed by the president."

Goodyear shares rose 36 cents, or 6 percent, to close Wednesday at $6.38. Goodyear shares have traded in a one-year range of $3.93 to $30.10.

Goodyear plant's future hinges on vote

GodAndRiver.com, February 11, 2009

Goodyear Tire & Rubber Co. and USW Local 831 negotiators have reached a tentative agreement on operations at the Danville plant in the face of an inventory surplus from the economic downturn.

Union members will vote on the agreement Feb. 19, according to the union’s Web site and Jo Andrews, communications manager for Goodyear in Danville.

Andrews also said Wednesday that the third partial furlough, scheduled for Feb. 21-28, would not take place.

“It has been canceled and will be rescheduled at a later date,” Andrews said.

Details of the agreement have not been released to the public. They will be presented to union members during two meetings on Feb. 19 at the Institute for Advanced Learning & Research. The meetings will be at 7:30 a.m. and 7:30 p.m.

Union members will vote on the agreement that day following the presentations. The vote will be by secret ballot, and polls will be open from 7:30 a.m. to 9 p.m., according to the union’s Web site.

The union’s local bargaining committee first met with local and corporate management Feb. 2.

“The company’s presentation was short and to the point about how the economic downturn is drastically affecting the tire industry,” according to a statement on the union’s Web site. “It is evident that the partial weeks out are not effectively reducing inventories.”

Goodyear officials returned to Danville for meetings Monday and Tuesday with the union on how to best reduce inventory and keep the Danville plant running efficiently.

Goodyear execs, union talking in Danville

Danville Register & Bee, February 10, 2009

Goodyear executives and union leaders are meeting this week to discuss the future of the company’s Danville plant.

Company executives arrived Monday and are expected to be in Danville through Wednesday.

The meeting follows last week’s session where United Steelworkers Local 831 officials were told recent furloughs have not done enough to reduce huge inventories. Danville plant workers just returned from a second weeklong furlough, with another scheduled for later this month.

Akron, Ohio-based Goodyear says restructuring plans will be announced Feb. 18 when yearly and fourth-quarter results are released.

With at least 2,000 workers, the Goodyear plant is Danville’s largest employer.

 

 

Union to host meeting on Goodyear's efficiency

Madison Messenger, February 4, 2009

United Steelworkers Local 831 members will meet for the second time in less than two weeks Monday to discuss ways of reducing inventory to keep Goodyear Tire and Rubber Co.’s Danville plant operating efficiently, according to the union’s Web site.

Members of the union’s bargaining committee met with local and corporate management on Monday to talk about the future of the Danville plant.

Akron, Ohio-based Goodyear said Tuesday it would be announcing cost-cutting plans Feb. 18, when it releases its fourth-quarter and full-year earnings for 2008.

Danville Goodyear employees who produce truck tires are currently on the second of three weeklong furloughs the company announced in December. The last furlough is scheduled to take place Feb. 21-28.

A posting on Local 831’s Web site reads: “It is evident that the partial weeks out are not effectively reducing inventories. Meetings are scheduled for next week beginning Monday, Feb. 9th to discuss other options on how to best reduce the inventory and continue to operate the Danville plant efficiently.”

Representatives of the union either could not be reached Wednesday or refused to comment on the meetings. Jo Andrews, communications manager at Goodyear’s Danville plant, said Wednesday she couldn’t share any details about the company’s plans.

Goodyear, the city’s largest employer, employs more than 2,000 workers.