Goodyear will discontinue tire production in Quebec
Goodyear Tire & Rubber Co. will discontinue tire production at its Valleyfield, Quebec, plant. The facility can produce 23,000 passenger tires at full capacity, according to Modern Tire Dealer research.
Goodyear expects to "substantially complete... transition of the Valleyfield facility to a materials mixing center by the end of the second quarter of 2007," according to company officials.
"The reduction in both capacity and labor in Valleyfield is related to
the company's ongoing global strategy to reduce excess high cost
The elimination of tire production in Valleyfield will reduce
Goodyear's excess high cost tire manufacturing capacity by an additional 7 million units and save the company $40 million a year.
This brings total reductions under Goodyear's cost savings plan to 21 million units versus the Akron, Ohio-based tiremaker's original targets of 15 to 20 million units by 2008.
The closing will result in total charges of $115 million to $120 million "for restructuring and accelerated depreciation, of which an expected $40 million to $45 million is cash.
"The charges associated with the intended action are expected to be between $70 million to $75 million in the fourth quarter of 2006," say Goodyear officials, "with the balance of the charges impacting 2007.
Valleyfield employs 1,000 hourly and salaried workers The mixing center is expected to employ approximately 200 people.
"In today's intensely competitive and increasingly global business
environment, we face some very difficult choices," says Jon Rich, president of Goodyear's North American Tire business.
"The decision to discontinue tire production at Valleyfield is one of those necessary steps to make Goodyear more competitive. This decision does not reflect on the commitment or performance of our Valleyfield associates."