Goodyear lays off 105 at Gadsden, cuts production

GADSDEN, Ala. — Goodyear has laid off 105 employees at its Gadsden consumer tire plant and cut the daily production ticket to between 2,000 and 5,000 tires.

With these latest cuts, the workforce stands at 411 hourly employees, down from about 1,200 just a few months ago and from more than 1,600 a few years ago, according to Mickey Ray Williams Jr., president of United Steelworkers Local 12, which represents workers at Gadsden.

The layoffs come just weeks after 740 hourly workers at the 90-year-old tire plant accepted buyouts as part of a realignment by Goodyear of its North American production capacity.

The daily production "ticket" at the plant is less than a third of output of 17,000 units per day at this time last year, Mr. Williams said, and only about 15% to 20% of the 25,000-plus units per day several years ago.

Mr. Williams said employees were given only a few days' notice before the cuts were announced Jan. 31. The layoffs initially were done on a voluntary basis, then by seniority, he added.

"We knew they could do it, we just didn't know if they would do it," he said. "It's just really a shame that Goodyear has led employees to think that they were protected and that they would retool USW plants in North America.

"This company is an American icon, but instead of investing in America, they went to Mexico to exploit cheap labor," Mr. Williams said, referring to the plant Goodyear built in San Luis Potosi, Mexico.

Goodyear said in a Feb. 4 statement that it is adjusting its staffing levels at Gadsden to accommodate the reduced production schedule.

"The Goodyear-Gadsden plant continues to rightsize staffing levels, including hourly and salary positions, to accommodate an adjusted production schedule, following recent voluntary buyouts for union associates," a spokesperson for Goodyear said.

Those who were laid off will get severance pay and benefits, Williams said, as negotiated in the USW contract.

"As part of our labor agreement through 2022, Goodyear told us that no plants would be closed," Mr. Williams said. "And they told us they would invest in American plants. Goodyear has not done that in Gadsden."

Goodyear has said it expects its revised U.S. manufacturing strategy — of which the Gadsden buyout and layoffs are a part — to yield about $30 million in 2020 in improved operating income in its Americas' segment, and estimates $40 million annually thereafter, according to an 8-K/A filing with the Securities and Exchange Commission related to the company's buyout expenses.

The move reportedly mirrors a similar strategy employed by the tire maker at two locations in Germany, where the company is looking to generate an earnings improvement of between $60 million and $70 million by 2022, while cutting up to 1,100 jobs between the two factories there.

In 2019, Goodyear made its first round of cuts at the Gadsden plant, laying off 170 employees in connection with a change in the plant's work cycle from seven days a week to five days a week, according to a union spokesperson.

Mr. Williams expressed continued frustration with the domestic effect of Goodyear's plant in San Luis Potosi, Mexico, which opened in 2017, as that plant continues to operate more cheaply, pushing tires into the American market and taking away jobs.

"They keep pumping in tires from Mexico," he said, adding that operational costs in Mexico are significantly less than in North America.

"Goodyear has been here since 1929, and they they have been a staple in the community. But it's a two-way street. We've been here for them as well."

Mr. Williams also addressed what he said are health concerns from employees at the Gadsden plant, saying Goodyear has not properly mitigated the toxic powder "lamp black," an additive in tire and paint production, from the grounds outside the facility.

"The question is, 'How are you going to clean this up?' " Mr. Williams asked. "This stuff is very harmful to people, and they've put no money into the clean up efforts."

Goodyear, in a Feb. 4 email, wrote that it is committed to the highest standards for operational excellence, and “meeting or exceeding the requirements of all applicable environmental laws and regulations, including the Alabama Department of Environmental Management and the United States Environmental Protection Agency regulations at our tire plant in Gadsden, Ala.”

Goodyear has said its strategy is to strengthen its manufacturing footprint by curtailing production of certain tires for declining, less profitable segments of the tire market. The Gadsden plant produces the Assurance passenger tire for cars and light trucks, Mr. Williams said.

The layoffs and buyouts at Gadsden are in contrast to the situation at Goodyear's plant in Fayetteville, N.C., where the company disclosed plans late in 2019 to invest up to $180 million to expand capacity for larger-rim diameter passenger tires.

The Fayetteville plant is rated at 40,000 units a day with 2,900 employees, according to Tire Business' Global Tire Report.

"For the rest of the workers on the floor here in Gadsden, we want to work, we are here to work," Mr. Williams said. "We have families who depend on us, and this community depends on us.

"There is nothing preventing Goodyear from presenting a decent ticket here, there is nothing stopping Goodyear from hiring folks here."