Goodyear to Close 92 US Retail Outlets

Goodyear plans to close 92 – 12 per cent – of its 742 company owned retail outlets in the US, and eliminate 600 full and part-time jobs. This decision to close these ‘underperforming’ shops is said to be a company response to pressure stemming from the US economic downturn.

“Following a rigorous review of operating performance and local market dynamics, these company-owned outlets are not producing acceptable returns,” said Scott Vogel, vice president, retail operations, North American Tire. “Taking this action now will allow us to focus our attention on locations with the best long-term potential. It will help position Goodyear to be a stronger competitor.”

“In the current economic condition, people are driving less, and it obviously affects every facet of the US auto industry, including how often they replace tyres or buy new cars,” added Goodyear spokesman Keith Price. “The current economic condition further impacted the stores, but they were not performing well before this year. And we don’t expect them to perform well.”

The locations of the shops to close have not as yet been announced, as Goodyear wishes to speak first with the approximately 500 full-time and 100 part-time employees who will be affected and the property owners of leased facilities. The company estimates the shop closures will enable it to cut US$9 million in annual losses, and reports it will most likely take after-tax charges of about US$30 million in connection with the closings, half of which would be recorded in the third financial quarter.

Goodyear’s net income in the second-quarter rose 34 per cent, due to international sales offsetting a slump in North American sales.