The Goodyear Tire & Rubber Company is taking another important step in its efforts to align North American production capacity with weak industry demand.
The company’s consumer tire plant in Union City, Tenn., will move from a continuous operating schedule to a five-day, three-shift operation on July 6.
In early May, United Steelworkers (USW) members at the plant ratified a local labor agreement that permits the schedule change. Approximately 550 associates will receive buyout packages as part of the change.
The Union City plant can produce about 12 million consumer tires a year for the original equipment and replacement markets and currently employs about 2,300 associates.
The company expects to record after-tax restructuring charges associated with this action of approximately $60 million primarily in the second quarter of 2009, which relate to cash severance payments that will be paid primarily in the third quarter.
Goodyear is one of the world’s largest tire companies. It employs approximately 71,000 people and manufactures its products in more than 60 facilities in 25 countries around the world.
Certain information contained in this press release may constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors, many of which are beyond our control, which affect our operations, performance, business strategy and results and could cause our actual results and experience to differ materially from the assumptions, expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to: deteriorating economic conditions or an inability to access capital markets; our ability to realize anticipated savings and operational benefits from our cost reduction initiatives or to implement successfully other strategic initiatives; actions and initiatives taken by both current and potential competitors; pension plan funding obligations; increases in the prices paid for raw materials and energy; work stoppages, financial difficulties or supply disruptions at our suppliers or customers; a labor strike, work stoppage or other similar event; our failure to comply with a material covenant in our debt obligations; the adequacy of our capital expenditures; potential adverse consequences of litigation involving the company; as well as the effects of more general factors such as changes in general market, economic or political conditions or in legislation, regulation or public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.