Goodyear To Close Philippines Tire Plant, To Cut 500 Jobs - Update

RTT News, July 17, 2009

Friday, Goodyear Tire & Rubber Co. (GT: News ) said it will close its tire plant in the Philippines, citing higher costs, which will resulting in a reduction of approximately 500 . of the company's 600 associates in the country. The company also said it expects to record a closure-related charge in the third quarter. The action, as part of a strategy to address uncompetitive manufacturing capacity globally, is expected to be completed by the end of the third quarter.

The company noted that its sales and marketing operations in the country are not affected.

The Akron, Ohio-based tire manufacturer said that the closure of the plant in Las Pinas will result in the reduction of nearly two million units of annual production capacity. Goodyear's strategy is to remove 15 million to 25 million units of capacity over the next two years. Production will be transferred to lower-cost plants in the company's Asia-Pacific Region. In Philippines, Goodyear has had a presence since 1919, and the Las Pinas plant was opened in 1956.

In addition, the company said it plans to record approximately $20 million in charges associated with the closure in the third quarter of 2009, principally for non-cash asset write offs.

Pierre Cohade, president of Goodyear's Asia-Pacific Region, stated, "Due to high costs compared to other plants in the region, tires produced in the Las Pinas plant are not competitive in the marketplace. Goodyear is committed to its business in the Philippines as well as continuous product innovation, and intends to maintain its market leadership through aggressive marketing, excellent customer service and superior products. This action will, in no way, disrupt our service to wholesale, retail and original equipment customers."

In late May, Goodyear had said that it would discontinue consumer tire production at a plant in Amiens, France, which would result in reducing about 820 jobs, as part of its strategy to reduce high-cost manufacturing capacity. The closure was due to the plant's uncompetitive costs. The production cease would result in reduction of about 6 million units of production.

While, in June, Goodyear announced that it would move its consumer tire plant in Union City, from a continuous operating schedule to a five-day, three-shift operation on July 6. The Union City plant can produce about 12 million consumer tires a year for the original equipment and replacement markets and currently employs about 2,300 associates.

Goodyear, Steelworkers extend contract 4 weeks

WRAL.COM July 14, 2009

AKRON, Ohio — Goodyear Tire & Rubber Co. and the United Steelworkers of America have extended their national contract four weeks until Aug. 15, both sides said Tuesday.

The three-year contract covering about 10,300 Steelworkers at seven Goodyear plants in the U.S. had been scheduled to expire Saturday. The extension was announced by the company in an e-mail statement. The union's contract Web site also detailed the move.

The Steelworkers said job security would overshadow other issues in contract talks covering workers in Akron; Buffalo, N.Y.; Danville, Va.; Fayetteville, N.C.; Gadsden, Ala.; Topeka, Kan., and Union City, Tenn.

All terms of the current agreement will remain in force with the extension, the union said.

Contract talks, which began last month, continue in Cincinnati.

Progress "remains slow," according to the union's bargaining committee's Web site. Still, the union "believes we can reach a new labor agreement before Aug. 15, 2009 that is fair and equitable to all of our members," the Web site said.

Goodyear said it was confident an agreement could be reached, but didn't specify when.
"We remain confident that we will reach an agreement that is acceptable to both sides," Jim Allen, Goodyear's chief negotiator, said in a statement released by the Akron-based company.