AKRON (Dec. 28, 2005) — Goodyear has completed the sale of its North American farm tire business to Titan International Inc. for $100 million following the approval of a new union contract at the Freeport, Ill., plant on Dec. 22.
The sale includes the farm tire manufacturing plant, property and equipment in Freeport as well as inventories. It also includes a licensing deal for Titan to pay a royalty to manufacture and sell Goodyear-branded farm tires in North America.
A new contract between Titan and the United Steelworkers was necessary because of a successorship clause in the union's contract with Goodyear. The companies first announced the deal in February, but it was held up on union talks.
Goodyear expects to report a loss of about $65 million on the sale. The Akron-based tire maker said it expects the sale to reduce revenue in its North American Tire segment by about $200 million annually, but it also will eliminate the need for more investment in the farm tire business.
Titan expects its 2006 sales to increase by about $250 million as a result of the deal.
“Closing the acquisition has been a long haul, and with this acquisition the Goodyear brand will again be the number one brand in North American farm tires, replacing Firestone,” said Maurice “Morry” Taylor Jr., Titan's chairman and CEO.
Titan said it will commence manufacturing in Freeport on Jan. 3 and would make “further announcements” about the plant in the first quarter.