Goodyear plans more cuts as sales, earnings tumble

Akron, Ohio -- Goodyear plans to cut its work force by another

5,000, freeze salaries and reduce capacity as part of a plan to trim

costs and regain profitability in 2009.

Those and other actions are aimed at addressing a weak economy and

losses in both the fourth quarter and for the full year, the company

said when it released its financial reports for 2008.

Other moves the company plans on making in 2009 include: the launch of

more than 50 new tyres; implementing new cost control policies to

eliminate nonessential discretionary spending; putting purchasing

actions in place to lower the cost of both raw materials and indirect

materials; cutting capital expenditures to between $700 million and

$800 million; reducing inventory levels by more than $500 million; and

pursuing the sale of non-core assets.

The tyre maker reported a loss of $330 million in the fourth quarter

compared to net income of $52 million in the same 2007 period. Sales

fell 26 percent to $4.1 billion in the quarter, despite increases in

Goodyear's branded market share, the firm said.

Goodyear suffered a net loss of $77 million in 2008 compared to 2007

net income of $602 million. The 2007 results included an after-tax gain

of $508 million on the sale of the company's former Engineered Products

business.

Sales for the year were $19.5 billion, less than 1 percent lower than

2007's record $19.6 billion. Revenues in 2008 reflect the $1.3 billion

negative impact resulting from an 8.5 percent reduction in tire volume,

according to Goodyear.

Also impacting the sales slide was the 2007 divestiture of the

company's T&WA tyre mounting business, which contributed sales of

$639 million in 2007, the company said, adding that favorable foreign

currency translation positively impacted revenues by $383 million.

Goodyear's Asia Pacific Tire, Latin American Tire and Europe, Middle

East and Africa Tire each achieved record full-year sales. North

American Tire's fourth quarter 2008 sales decreased from 2007 largely

because of tyre volume declining 17 percent reflecting significantly

lower industry demand.