AKRON (May 26, 2009) — Goodyear plans to stop producing passenger and light truck tires by late 2010 at a plant in Amiens, France, as part of its strategy to reduce high-cost manufacturing capacity globally.
Farm tire production at the 49-year-old plant would continue, Goodyear said, preserving about 380 of the plant's 1,200 positions.
“This action is a result of the plant's uncompetitive costs,” said Serge Lussier, vice president of manufacturing for Goodyear´s Europe, Middle East & Africa region. “Reaching a union agreement to modernize the operation proved impossible. Due to high costs and weak industry demand, the consumer tires produced there are uncompetitive in the marketplace.”
Discontinuing consumer tire production at the plant would eliminate about 6 million units of annual production capacity, which would be part of Goodyear's strategy to cut global capacity by 15 million to 25 million units by 2011.
Production at a second tire plant in Amiens — originally built by Dunlop Ltd. in 1958 and acquired by Goodyear in its 1999 acquisition of the European and U.S. Dunlop manufacturing assets of Sumitomo Rubber Industries Ltd. — would not be impacted by this action. That plant employs about 1,000, Goodyear said.
The company employs approximately 3,500 in France.
Goodyear estimates charges associated with the plan would be $55 million — approximately $30 million after taxes and minority interest — the majority of which will be recorded in the second quarter of 2009. These charges primarily relate to cash severance payments that will be made as actions are taken in the future.
The action is expected to be complete by the third quarter of 2010.
Goodyear has been involved in negotiations with workers at the two Amiens plants since early 2008 to restructure their contract in a bid to reduce costs.