AKRON (June 30, 2006) — Goodyear plans to close its Upper Hutt, New Zealand, passenger tire plant by late this year or early in 2007 as part of its strategy to reduce high-cost manufacturing capacity globally.
Goodyear's South Pacific Tyres business in Australia/New Zealand has begun talks with employees and union representatives regarding the proposal to close the plant. The 47-year-old plant, which has about 400 employees, produces about 2 million radial passenger car tires per year.
Goodyear said the Upper Hutt plant has experienced greater pressure than in many other markets due to high costs, competition from low-cost imports and the lack of domestic auto production.
Goodyear Chairman and CEO Robert J. Keegan said the proposed closing is part of the company's objective to generate annual savings of $100 million to $150 million. Closing Upper Hutt would result in restructuring charges of about $35 million, Goodyear said, but also yield annual savings of about $15 million.
“A key component of our strategy is the elimination of high-cost tire manufacturing capacity,” he said.
Despite the proposed closing, Goodyear said it remains committed to the consumer and commercial tire markets in New Zealand and would supply customers with product produced in other countries in the Asia Pacific region, according to South Pacific Tyre CEO Joseph Copeland.
The closing would leave New Zealand with just one tire plant, Bridgestone New Zealand Ltd.'s car and light truck tire plant in Christchurch.