AKRON — Goodyear is studying a plan to restructure its U.S. operations in a bid to improve business competitiveness, chief financial officer Darren Wells told the investment community recently.
"We are working on a significant restructuring plan to reduce low-value, high-cost capacity in the U.S.," Mr. Wells said during the firm's second-quarter financial results conference call with financial analysts.
The move will bring about savings "at least as high as the actions in Germany," Mr. Wells said, referring to a reorganization program under way in Germany that's expected to generate an improvement of $60 million to $70 million in segment operating earnings by 2022 while cutting up to 1,100 jobs at two factories there.
Mr. Wells declined to go into specifics about the U.S. plan, telling the analysts "there is inevitably some uncertainty in timing, given the steps we have to take prior to announcing something."
He did, however, say company officials "feel good about the track record we have, delivering these kinds of initiatives and the savings associated with them."
The restructuring Mr. Wells was referencing would be in addition to a plan announced in early July to "modernize and improve operations and efficiency" at the firm's Fayetteville, N.C., plant, which will include expanding capabilities to produce high-value tires with rim diameters of 17 inches and greater.
The plan there is valued at more than $180 million and includes incentives valued at $30 million from the state.
In Germany, Goodyear plans to upgrade plants in Hanau and Fulda operating under its Goodyear Dunlop Tires Germany subsidiary, increasing annual capacities there for tires with rim diameters of 17 inches and larger by 2.5 million while reducing capacity for smaller, less profitable tires at both plants.
These plants employ about 2,800 hourly workers now — 1,300 in Hanau in western Germany and 1,500 in Fulda in central Germany. Both plants are rated at 21,000 passenger and light truck tires a day.
Goodyear is budgeting roughly $125 million for the factory restructuring and said in March it estimated pre-tax charges associated with this plan would be at least $135 million.
Goodyear operates two other plants in the U.S. with passenger tire capacity --- in Gadsden, Ala.; and Lawton, Okla. The Gadsden (1,600 employees) plant is unionized, while the Lawton factory (2,800 employees) is not.