Goodyear to Cut 870 Jobs at French Operations-Report

Global Insight, May 26, 2009

Goodyear is planning to cut 870 jobs at its Amiens plant in France owing to the deterioration in business prospects amid the ongoing economic downturn, according to an Agence France-Presse (AFP) report. AFP said that the Goodyear management would reveal its intentions over the impending lay-offs "during the first-half of June, after the establishment of the central council from the [French government] elections in April." He added that about 100 jobs could also be cut at Goodyear's Montlucon (Allier) facility; but company officials have denied this speculation, although confirming that the negotiations are ongoing with the local worker unions at its Amiens facility.

Significance: Goodyear cut 400 jobs at its Amiens plant last year. However, the company management and trade union leaders have been in constant disagreement over the future of the plant ever since. Goodyear announced in January 2008 that its European business unit was planning to reduce tyre production at its two factories in Amiens, because their costs were not competitive. Goodyear has subsequently shifted production of some of its tyres to its other lower-cost factories in Europe and elsewhere, while some products were eliminated. Goodyear has already laid off 3,800 workers globally during the first quarter and aims to reduce its built-up inventory by over $500US million during the year, on the lines of its Four-Point Cost Savings Plan aimed to achieve $2US.5 billion gross cost savings by the end of 2009 (seeUnited States: 30 April 2009:). The job losses represent over 50% of the plant's workforce.