Goodyear to Build New Factories in Asia, Eastern Europe

On August 15 Goodyear made mention of plans to build new tyre factories in Asia and Eastern Europe in addition to expanding capacity at existing facilities. These new additions come as part of the tyremaker’s plans to increase global capacity for high margin tyre lines by 40 per cent and capacity in existing low-cost facilities by a third. According to Goodyear, these new plants and increased capacity will be instrumental in company plans to source half its global tyre production from low-cost countries by 2012.

The US tyre major also plans to inject funds into its facilities in Fayetteville, North Carolina, and Gadsden, Alabama, to increase their capacity for producing higher-margin tyre lines.

These new investments are one side of a program of restructuring that has also seen upheaval in other parts of the world. Goodyear has closed plants or is planning closures in the UK, New Zealand, Morocco, Canada and the US, and company assets have been sold off. However, through its commitment to these sometimes painful measures the company remains on track for $1.8 billion to $2 billion of annualised gross cost savings by the end of 2009. The sale of Goodyear’s Engineered Products Division to the Carlyle Group was finalised on August 1, and the proceeds from the sale will be used to expand its business, reduce debt and fund a healthcare trust fund for union retirees.