Goodyear To Close New Zealand Tyre Plant

Goodyear Tire & Rubber Company is taking steps towards closing a New Zealand tyre plant. The news is part of a series of cost-cutting measures (including European job cuts) that Goodyear is enforcing around the world. Goodyear said the move was “part of its strategy to reduce high-cost manufacturing capacity globally.”

The proposed closure is expected to be completed within six to eight months and create annual cost savings of approximately $15 million in Goodyear’s Asia Pacific region. It would result in restructuring charges of approximately $35 million ($35 million after tax), of which approximately $20 million is expected to be cash charges.

The company’s South Pacific Tyres (SPT) business has initiated consultation with associates and union representatives regarding the proposal to close the plant in Upper Hutt, New Zealand. The plant, which has about 400 employees, produces about two million radial passenger car tyres per year.

Formed in 1987 as a joint venture, SPT has been wholly owned by Goodyear since January 2006. The leading tyre maker and marketer in Australia and New Zealand, it has 4,000 associates and annual sales of more than $700 million. Its results have been consolidated with those of Goodyear’s Asia Pacific region since January 2004.

Goodyear and SPT report that they remain committed to the consumer and commercial tyre markets in New Zealand and would supply customers with products produced in other countries in the Asia Pacific region, according to SPT chief executive Joseph Copeland.

“A key component of our strategy is the elimination of high-cost tyre manufacturing capacity,” said Goodyear chairman and CEO Robert J. Keegan. “Our objective is to take actions over the next three years that will result in annual savings of between $100 million and $150 million.”