Goodyear seals the deal: $550 million tire factory going to Mexico
Goodyear Tire & Rubber Company has announced the location of its new tire factory to serve customers in the Americas: San Luis Potosi, Mexico. Goodyear Chairman and CEO Richard Kramer made the announcement during a ceremony with Mexican President Enrique Peña Nieto.
The new factory is an investment of up to $550 million, and combined with investments in its existing U.S. and Canadian factories, will enable Goodyear to meet the strong and growing market demand for high-value-added (HVA) consumer tires in North America and Latin America. Industry demand for HVA tires in these regions is expected to increase by 10 million tires per year from 2014 to 2019.
“This is an important investment in Goodyear’s future,” says Kramer. “Our new factory will provide us with a world-class manufacturing asset and will be a strong complement to our existing plants in North America and Latin America. The new plant advances our strategy to serve the needs of our customers and is consistent with our focus on investing in high return projects that drive profitable growth.”
The factory, to begin production in mid-2017, will be Goodyear’s most technologically advanced, and will have a capacity of about 6million tires per year. When it reaches full production, the factory will employ about 1,000 people.
Goodyear’s selection of San Luis Potosi follows an extensive review of potential locations throughout the Americas. The review took into consideration factors including cost structure, logistics, infrastructure, skilled workforce, tariffs and quality-of-life issues.
“San Luis Potosi is an ideal location for the new factory," says Kramer. "Its central geographic location will enable us to support our valued customers and consumers throughout North America, Mexico and Latin America."
The factory will reflect Goodyear’s commitment to the environment. It will be a zero-waste-to-landfill and zero-solvent facility, and it will use natural gas, energy efficient LED lighting and state-of-the-art dust collection equipment.
Total capital investment for the project will be approximately $500 million to $550 million, net of government incentives, and is consistent with the company’s existing capital allocation plan. Its outlook for 2015 and 2016 capital expenditures remains unchanged at $1.1 billion and $1.2 billion to $1.3 billion, respectively.
For more information about Goodyear and its products, go to www.goodyear.com/corporate.
Read more: Goodyear to break ground in Mexico in June
Watch the video of the announcement. Kramer's remarks begin around the 18:30 mark: https://www.youtube.com/watch?v=0BRczGcfuoU