Goodyear’s German factory closures will cost ~$600 million, save $120 million yearly by 2027

Goodyear has confirmed that ending tyre production at its Fulda and Fürstenwalde factories in Germany will be recorded as a charge of “between $575 million and $600 million”. Of that, $425 million to $450 million is “primarily for associate-related costs and other exit costs”. The remainder represents “non-cash charges of approximately $150 million” related to “…accelerated depreciation”.

To break that down into Goodyear’s financial schedule, the company expects to record around $190 million of pre-tax charges in the fourth quarter of 2023. That is in addition to the $67 million related to the previously-announced Fulda plan. In 2024 the actions will cost between $90 million and $110 million. And then another $110 million and $130 million in 2025.

Goodyear expects these actions to improve EMEA’s segment operating income by “achieving annual run rate savings of approximately $60 million by the end of 2025, $100 million by the end of 2026 and $120 million by the end of 2027.”