GADSDEN, Ala.—Goodyear's Gadsden plant, once slated to lose tire manufacturing altogether, may be the recipient of a $100 million investment if the state of Alabama ponies up $8 million to tear down the unused portion of the mammoth factory. In mid-February, Goodyear officials from Akron, the plant and United Steelworkers of America Local 12 met with representatives from Alabama state, county and city government.
The firm submitted a proposal to receive government aid to remove the portion of the Gadsden factory that surrounds the modern manufacturing cell where Goodyear makes tires.
The main part of the Gadsden plant was opened in 1929, but an adjacent, mostly stand-alone facility was erected in 1978 at the front of the complex to build radial tires. The whole complex comprises about 2.7 million square feet, and Goodyear has proposed leaving about 1.6 million square feet, including the radial plant and the mixing operation.
Goodyear said getting rid of the unused buildings will make the remaining facility more efficient and help decrease fixed costs. There was no expected timetable given on how long it would take to get an answer on the proposal.
Should the various governmental entities agree to Goodyear's request, the company said it may—if a number of other key variables fall in place—invest as much as $100 million over a several-year period to elevate the operation from "swing plant" status to a full competitive facility.
That marks quite a turnaround from just a year ago. In February 1999, on the same day Goodyear announced its alliance with Sumi-tomo Rubber Industries Ltd., the firm said it would discontinue tire production in Gadsden, leaving just a mixing operation employing about 200.
Later in the year, however, as Goodyear was suffering from falling fill rates, Goodyear decided to keep producing tires there as a swing plant, with production currently at about 17,500 radial passenger and light truck tires. A more flexible working agreement approved by Local 12 members was key to the continuing tire production.
"Certainly we think the plant is doing great," a Goodyear spokeswoman said. "The union has been working with us to make it a competitive facility. They've been very aware of the competitive situation. That's made a definite difference."
To take the plant to the next level as a competitive, global factory, would require the $100 million investment to boost capacity probably to about 30,000 tires a day, according to a source close to the situation.
But Goodyear wants to caution the workers that even if the demolition takes place, the further investment isn't guaranteed at this point. After several media reports focused mainly on the $100 million investment, Plant Manager Don Heath and Local 12 President Mickey Williams sent a joint letter to employees explaining the situation.
"IF we are able to eliminate the obsolete buildings; IF market conditions warrant; IF plant productivity continues at an acceptable level, the company will consider bringing the 1.6 million square feet that remain up to full capacity," the letter said.
"We want to make sure you understand that Goodyear is not making any commitments to specific investment at this point. However, the company is exploring the options and is in talks with the government as part of the process that could lead to a financial commitment."
The letter also said workers should focus on making the operation the best it can be, with improvements already showing up in productivity and safety.
Right now, the facility employs about 1,300 hourly and salaried workers. If Goodyear goes ahead with the full investment, that number could rise by about 300.
Local 12's Mr. Williams is very pleased with the opportunity, but had agreed not to discuss details of Goodyear's plans.
There still are more than 200 former Gadsden employees who moved under preferential hiring procedures to Goodyear tire facilities in Union City, Tenn.; Topeka, Kan.; and Danville, Va. Those workers, along with the 60 to 70 still on regular layoff, would have first recall rights to any new future positions.