AKRON—Goodyear said Oct. 30 it plans to close its tire manufacturing plant in Tyler, Texas, as part of its previously announced strategy to stop supplying certain segments of the private label tire business.
The Tyler plant is one of eight U.S. tire plants the United Steelworkers (USW) union has been striking since Oct. 5. The Texas facility has estimated capacity of 25,000 passenger and light truck tires a day, according to the company.
Goodyear said the closing will eliminate about 1,100 jobs, save about $50 million a year after taxes and result in a restructuring charge of between $155 million and $165 million after tax. The cash portion of the charges is estimated to be between $40 million and $50 million.
The closing will be timed to minimize the impact on Goodyear customers, said Jon Rich, president of Goodyear's North American Tire (NAT) unit.
The United Steelworkers union reacted strongly to Goodyear´s announcement.
“How do you talk about saving American manufacturing and at the same time close another facility?” asked Tom Conway, a USW vice president who is serving as union chairman in the negotiations with Goodyear, referring to a recent letter Mr. Rich sent to Goodyear employees. “How can this company make claims that cheap imports are hurting them when the truth is they are intent on abandoning their markets and refusing to stand and fight for their market and the business?”
When the company announced in June it would cut back its private label tire business, it said that correlating capacity reductions in North America would be based on plant performance, capabilities, cost savings opportunity and the focus on serving customers for its NAT business.
Goodyear said the Tyler plant mainly manufactures small-diameter passenger tires, a segment under pressure from low-cost imports. The company earlier announced it planned to reduce costs by more than $1 billion by 2008, including reduction in high-cost tire manufacturing capacity.
No new formal contract talks have been scheduled between Goodyear and the USW. Overall, 15,000 USW members are striking at 16 Goodyear facilities in the U.S. and Canada.