Goodyear cuts 700 Asia Pacific jobs

The Goodyear Tire & Rubber Company approved “a rationalization plan in Asia Pacific to improve profitability in its Australia and New Zealand operations” on 19 September 2023. The plan exits 100 retail and fleet locations and nine warehouses at the cost of 700 jobs. In other words, it changes the company’s operating model to a third-party distribution and retail sales model instead of a company-owned approach. That specifically means moves such as the recent appointment of National Tyre & Wheel Limited (National) as the exclusive distributor of the Dunlop tyre brand in Australia and New Zealand.

Goodyear expects to complete the Asia Pacific rationalization plan by the end of 2024 and estimates associated pre-tax charges to be between $55 million and $65 million, of which $40 million to $50 million are expected to be cash charges primarily for associate-related and lease exit costs.

Those charges will be split into $20 million of pre-tax charges in the third quarter of 2023 and approximately $5 million of pre-tax charges in the fourth quarter of 2023. The majority of the remaining charges will be recorded in 2024.

These actions are expected to improve Asia Pacific’s segment operating income by approximately $50 million to $55 million in 2025 and annually thereafter, primarily through a reduction of selling, administrative and general expenses.

But it doesn’t end there. According to official filings, “the rationalization plan is a part of a broader set of actions the company expects to take in order to fundamentally streamline its business, improve its competitive position and drive growth.”

Indeed, Goodyear representatives report that they will “share this broader plan with investors during the fourth quarter” of 2023.

The 700 job cuts are in addition to the 1200 job cuts recently announced in Goodyear’s Europe Middle East and Africa (EMEA) region.