Goodyear lays off 105, cuts production at US plant

Gadsden, Alabama – Goodyear has laid off 105 employees at its Gadsden consumer tire plant and cut the daily production ticket to between 2,000 and 5,000 tires.

With these latest cuts, the workforce stands at 411 hourly employees, down from about 1,200 just a few months ago and from more than 1,600 a few years ago, according to Mickey Ray Williams Jr., president of United Steelworkers Local 12, which represents workers at Gadsden.

The layoffs come just weeks after 740 hourly workers at the 90-year-old tire plant accepted buyouts as part of a realignment by Goodyear of its North American production capacity.

The daily production "ticket" at the plant is less than a third of output of 17,000 units per day at this time last year, Williams said, and only about 15% to 20% of the 25,000-plus units per day several years ago.

Williams said employees were given only a few days' notice before the cuts were announced 31 Jan. The layoffs initially were done on a voluntary basis, then by seniority, he added.

"This company is an American icon, but instead of investing in America, they went to Mexico to exploit cheap labour," commented Williams, referring to the plant Goodyear has built in San Luis Potosi, Mexico.

Goodyear is adjusting its staffing levels at Gadsden to accommodate the reduced production schedule, said a 4 Feb company statement.

"The Goodyear-Gadsden plant continues to right-size staffing levels, including hourly and salary positions, to accommodate an adjusted production schedule, following recent voluntary buyouts for union associates," a Goodyear spokesperson said.

Goodyear has said it expects its revised US manufacturing strategy — of which the Gadsden buyout and layoffs are a part — to yield about $30 million (€27.4 million) in 2020 in improved operating income in its Americas' segment.

The company also expects to gain $40 million annually thereafter, according to an 8-K/A filing with the Securities and Exchange Commission related to the company's buyout expenses.

The move reportedly mirrors a similar strategy employed by the tire maker at two locations in Germany, where the company is looking to generate an earnings improvement of between $60 million and $70 million by 2022, while cutting up to 1,100 jobs between the two factories there.

In 2019, Goodyear made its first round of cuts at the Gadsden plant, laying off 170 employees in connection with a change in the plant's work cycle from seven days a week to five days a week, according to a union spokesperson.