Goodyear to shut down US tire plant

Gadsden, Alabama – Goodyear will permanently close its 90-year-old passenger tire plant in Gadsden as part of the firm's strategy to strengthen its competitiveness by focusing on growing, more profitable segments.

Goodyear disclosed the plan in a 23 April 8K filing with the Securities and Exchange Commission.

In the filing, Goodyear said it reached a tentative bargaining agreement with the United Steelworkers (USW) union local at the plant and subsequently approved a plan to close the factory, which Goodyear already had scaled back significantly over the past few years.

The tentative bargaining agreement remains subject to approval by the membership of the local union, Goodyear said.

In February, Goodyear laid off 105 employees at the plant and cut the daily production ticket to between 2,000 and 5,000 tires. The cuts trimmed the workforce to 411 hourly employees, down from more than 1,600 a few years ago.

Goodyear said it expects the combined impact of these rationalisation actions to yield $130 million (€120 million) of annual savings in 2021 compared with 2019.

Due to the closing, Goodyear estimates it will incur pre-tax charges of about $280 million to $295 million. 

The company expects to substantially complete this rationalisation plan by the fourth quarter of 2021.

The layoffs in February came just weeks after 740 hourly workers at the plant accepted buyouts as part of a realignment by Goodyear of its North American production capacity.

Goodyear said earlier scaling back Gadsden was part of its strategy to strengthen the competitiveness of its manufacturing footprint by curtailing production of tires for declining, less profitable segments of the tire market.

The daily production "ticket" at the plant was more than 25,000 several years ago. The plant is one of five unionized factories Goodyear operates in the US.