Goodyear is cutting up to 50 per cent of the jobs at its tyre factory in Fulda, Germany, which will result in “a similar sized” cut in tyre production, the tyre manufacturer announced today. Since around 1100 people are employed at the Fulda tyre factory, that means around 550 jobs will be cut. The news comes as a result of Goodyear’s review of its manufacturing footprint.
Elliott Investment Management’s letter to Richard Kramer and members of the Goodyear Board of Directors contains the reassurance that it does not seek “any reductions in plant capacity or factory workforce.” Comforting words perhaps for members of the 74,000-strong Goodyear Tire & Rubber Company team engaged in production within the company’s 57 factories, but office-based employees have less reason to breathe easy.
Despite a first-quarter 2023 net loss of $101 million, down $197 million compared with $96 million of positive income 12 months ago, Goodyear executives tried to shine a positive light on the US-based tyremaker’s latest financial results. Volumes may have been 3.2 million units lower than the same period last year at 41.8 million units, but net sales grew 1 per cent compared with the first quarter of 2022 and 4 per cent excluding foreign currency effects. And Goodyear EMEA is back to breakeven, but that wasn’t enough to avoid talk of accelerated cost-cutting measures.
A week after parent company Nokian Tyres reported an operating loss of 18.8 million euros for the first quarter of the year, Nokian Heavy Tyres has announced commencing what it calls “change negotiations” to lower production at its Nokia, Finland plant in line with “the market and demand situation.” Approximately 160 employees are affected.
Goodyear reported net losses of $104 million (£85.81 million; 96.71 million euros) in its fourth-quarter 2022 results. By comparison, the same period of 2021 saw $553 million of income. Meanwhile, net sales grew six per cent to $5.374 billion in the period despite 3 per cent lower unit volumes compared with the same period in 2021.
In the absence of specific information regarding Goodyear’s plans to cut 5% of its salaried workforce worldwide, uncertainty exists as to where the axe will fall. But it appears Luxembourg has been spared the worst, with media firm RTL Luxembourg reporting that Goodyear has “no official plans” to make staff redundant there. But this doesn’t mean they’ll be entirely unaffected by the tyre maker’s belt-tightening.
Goodyear’s decision to cut 5 per cent of its global salaried employees is shocking enough for the firm’s 72,000-strong worldwide workforce. However, the fact that senior executives directly linked that decision to the company’s worse-than-expected performance in the EMEA region (Europe Middle East and Africa) is giving employees in those countries extra cause for concern.
In what may be a poorly timed coincidence the announcement of a notable reduction in Goodyear’s global workforce came just days after the union representing many employees in Germany confirmed demands for more money. On 25 January, union IG BCE shared details of upcoming negotiations on behalf of 25,000 rubber sector workers, naming Goodyear as one of the “large companies” it represents. The union’s income wishlist includes a cost of living pay rise and one-off inflation bonus.
Michelin has announced its intention to “evolve” its activities in its France by means of a three-year competitiveness plan covering all of its manufacturing, corporate and administrative operations within the country. The company is taking this step as a response to “profound, structural shifts in the global tyre market” over the past decade that have been “led by the massive influx of low-cost products.” The plan could see up to 2,300 of the 20,000 Michelin jobs in France cut over the coming three years.
Strong words from one of the unions representing workers at the Continental tyre factory in Aachen, Germany. Speaking with Munich-based newspaper Süddeutsche Zeitung, IG BCE trade union chairman Michael Vassiliadis stressed that the planned job cuts “will be expensive”. He also claimed that Continental has turned away potential investors.
Continental is expanding the restructuring programme it initiated in 2019. The company is adding further measures to cut costs and increase efficiency to its Transformation 2019-2029 programme. The tyre manufacturer wants to achieve gross annual savings of more than 1 billion euros by 2023. This is significantly more than previous targets – in fact more than doubling the initially quoted figure. In total it expects the changes to affect more than 30,000 jobs worldwide. Its workers in Conti’s domestic market in Germany will be the largest part, with 13,000 affected jobs. A further major proportion will be in countries with high labour costs. Conti says these jobs will be modified, relocated, or made redundant. Conti says the programme aims to ensure its viability and strengthen global competitiveness in the long term.
Supercar manufacturer and historic Formula 1 competitor McLaren is expected to cut 1200 jobs, according to UK news reports. The redundancies, which amount to more than a quarter of its 4,000-strong workforce, represent the UK company’s response to the damage inflicted by the coronavirus pandemic on the car sector. Staff reductions are expected to be spread across its road car, F1 and Applied Technologies divisions.
More than eight per cent of Continental’s current global workforce may be affected by measures introduced over the coming decade to reduce its gross costs by 500 million euros a year from 2023. Continental says up to 20,000 jobs worldwide are expected to be affected by this restructuring programme over the coming ten years; around 15,000 of these by the end of 20
As many as 275 jobs at Sensata Technologies (formerly known as Schrader International before the TPMS sensor business was bought by Sensata) are at risk after it was announced that 125 are being axed at the factory in Carrickfergus, Northern Ireland.
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