Goodyear Reducing Production at Tennessee Consumer Tyre Plant

As of July 6, production at Goodyear’s consumer tyre facility in Union City, Tennessee will move from a continuous operating schedule to a five-day, three-shift operation. The manufacturer describes this cutback as “another important step” in its efforts to align production in North America with current weaker industry demand.

Although the plan to change production to a five-day schedule was announced last February, the reduction became possible following the United Steelworkers’ ratification of a local labour agreement in early May. Approximately 550 workers are receiving buyout packages as part of this deal.

Goodyear anticipates that the after-tax restructuring charges linked to this cutback will amount to approximately US$60 million, mostly in the second quarter of 2009. This sum relates primarily to cash severance payments, which will largely be paid during the third quarter.