AKRON (Sept. 21, 2006) — Goodyear has agreed to sell its global tire cord operations, with facilities in Luxembourg, Brazil and the U.S., to Hyosung Corp. of South Korea for $80 million.
As part of the deal, Goodyear agreed to a long-term supply agreement with Hyosung, with expected purchases of $350 million to $400 million in the first year alone.
The assets being sold include tire fabric plants in Colmar-Berg, Luxembourg, Americana, Brazil, Decatur, Ala., and Utica, N.Y. The business employs about 1,000, Goodyear said.
Goodyear said it believes the sale will bring cost savings and improved cash flow.
“As Goodyear drives for improved profitability, we are focusing more activity and investment on our core business of providing innovative consumer and commercial tires for our customers,” Goodyear chairman and CEO Robert Keegan said.
Seoul-based Hyosung has said it is the only supplier globally of steel, polyester and nylon yarn for tire reinforcement, claiming a 24-percent global market share.
Last year it bought Michelin North America (MNA) Inc.´s steel cord facility in Scottsburg, Ind., and signed a 10-year supply agreement with Michelin. In 2002 it bought MNA's Scottsville, Va., textile processing plant and signed a seven-year supply agreement.