Goodyear Ceases Production at Tennessee Facility
As a result of the closing and payments to approximately 1,800 associates under the federal Worker Adjustment and Retraining Notification Act, the firm expects to record additional after-tax charges of approximately $20m. The majority of these additional charges will be recorded in the second quarter of 2011.
On February 10, 2011, Goodyear has said to close its tire manufacturing facility at Union City, Tennessee, by the end of 2011 to reduce high-cost manufacturing capacity and provide cost effective high-value-added products based on market demand and continuing to make high quality products for its customers.
As part of the firm's strategy to eliminate around 15 million to 25 million units of high-cost capacity in 2009, the closing will eliminate 12 million units of available capacity, and is expected to provide annual cost savings of approximately $80m.
Richard Kramer, chairman and CEO of Goodyear, said: â€œWhen we announced our intention to close the plant, we expected the shutdown would occur by year-end. Since then, the product transfers to the other Goodyear plants have been completed more quickly than expected. We are now able to meet the needs of our consumer tire customers without further production in Union City.â€
â€œWhile we are committed to manufacturing in North America, all of our plants must be cost competitive and be able to demonstrate sustainable world-class productivity. That is not the case with this plant, and as a result, the market has moved beyond what the factory is able to build.â€
Tire manufacturer Goodyear employs approximately 72,000 people. It has two innovation centers in Akron, Ohio and Colmar-Berg, Luxembourg.
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