Goodyear breaks ground for Mexico factory

SAN LUIS POTOSÍ, Mexico (July 31, 2015) — Goodyear broke ground July 28 at a formal ceremony for the first plant it will build in the Americas in a quarter of a century.

The 1 million-plus-sq.-ft. plant, representing an investment of up to $550 million, will be built on a 94-acre plot of land in an industrial zone on the southern edge of the city of San Luis Potosí in central Mexico.

The cornerstone will be laid in November and the facility will be operational by July 2017, Martin Rosales, president and managing director of Goodyear Mexico, told dignitaries attending the ceremony.

Speaking at the ceremony, ony, Jean-Claude Kihn, president of Goodyear Latin Americasince November, said the plant will have an annual production capacity of 6 million high-value-added tires, such as the Eagle F1 performance passenger and Wrangler All-Terrain Adventure with Kevlar light truck/SUV tires.

Mr. Rosales told Tire Business separately that Goodyear has signed an agreement with the CTM trade union, which will offer its representation to the plant's 1,000 blue-collar workers — most of whom will be local residents.

The CTM — Confederación de Trabajadores de México (National Confederation of Labor Unions) — was founded in 1936 and was once notorious for its belligerence. However, CTM-led strikes are a rarity today.

Asked for details of any financial incentives that Goodyear may have received from Mexico's federal, state and/or municipal governments to support its investment in a plant in Mexico, Mr. Rosales demurred before stating that infrastructure, including railroads, highways and inland customs services, and the “seriousness” of Mexican authorities were more important than financial incentives.

“These (financial incentives) are always short term,” he said. “Infrastructure is long term. This is much more important than a fiscal incentive.”

The San Luis Potosí plant is known within Akron-based Goodyear as the “Americas Project.”

Goodyear has five tire plants in Latin America — one each in Brazil, Chile, Colombia, Peru and Venezuela. It operated a plant in Mexico, in Tultitlán, a dozen or so miles outside Mexico City, for 60 years, but shut it in 2001 “because its high costs are incompatible with current economic conditions,” the firm said at the time.

Mr. Rosales said when Goodyear decided to return to Mexico three years ago, five states, including San Luis Potosí — which is 260 miles northwest of Mexico City — met all the requisites.

“Every one of them had what we had been looking for over a period of 10 months,” he told Tire Business.

General Motors Co. has a car assembly plant in the city, while BMW A.G. plans to start assembling 150,000 vehicles a year at a $1 billion plant it is building there in 2019.

Goodyear Mexico has posted a video-animation flyover of the plant, showing both architectural blueprint-style images and artist's renderings of the plant.

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Stephen Downer is a Mexico-based freelance writer who covers that country and Latin America for Tire Business and its Latin America e-newsletter. To contact Mr. Downer, call or email the Tire Business editorial staff.