More Closures on Horizon at Goodyear

Goodyear Tire & Rubber Co. chief financial officer Richard Kramer has announced that the company will continue to “attack high-cost factories” as part of its programme to lower its worldwide operating costs.

The world’s third-largest tyremaker is currently part way through a three-year plan to reduce the percentage of high-cost plants it owns by 8 per cent to 12 per cent. In a speech at an auto analyst conference, Kramer confirmed that more plant closures lie in the future. “We will continue to attack high-cost factories,” he said, but did not give specific details of which plants have been earmarked for attention.

The successful settling of recent contracts will enable Goodyear to perform more competitively, but Kramer pointed out that the company still faces intense competition from overseas tyremakers operating with lower cost bases. And with the cost of key raw materials on the rise, Kramer added that Goodyear has so far successfully managed to offset these increases through price adjustments.

In terms of the recently ended 12-week USW strike, it has been reported that the new contract will save the company $610 million between now and 2009, with $70 million coming in 2007, $240 million in 2008 and $300 million in 2009.